Twitter’s ad model: #fail or #win?

Twitter's new ad model should be about extension and engagement, but is it just Google AdWords by a different name? Canadian experts weigh in.

While it’s not the most innovative ad revenue model the internet has seen, Twitter’s new ‘promoted tweets’ are the start of what marketing experts say could be a valuable tool for brand extension and consumer engagement.

Yesterday afternoon, Twitter users who entered ‘Starbucks,’ ‘Best Buy’ or ‘Virgin America’ would have seen the first example of the promoted tweets – 140-character blurbs that a brand has posted about its product or service, which will come to the top of the search list.

For example, Starbucks’s first promo boasted that anyone who came in the store with their reusable travel mug on April 15 would get a free cup of java. Users can re-tweet (RT) or reply to the ad as they would with any other message, but it will be clearly marked as an advertisement. Ideally, the Starbucks ad prompted the Twittersphere to RT the message before rushing to the coffee shop, eco-friendly tumblers in hand.

The business model will initially work on a cost-per-thousand basis, according a report on AdAge, but Twitter hopes to later implement a revenue approach called ‘resonance,’ where the impact is judged on how many times a tweet is passed around, marked as a favourite or clickthroughs the posted link gets.

Any time there is a new platform with the mass reach Twitter has, it’s a huge deal for the advertising industry, says Mitch Joel, president of Montreal-based digital marketing agency Twist Image. It is also the first social network that is better on mobile than on the web, he adds.

‘It’s not what it does today that’s interesting it’s what going to do,’ Joel tells MiC. ‘Marketers will do that typical stuff that marketers do – they’ll say ‘hey, because you mentioned Apple, our new iPad is coming out tomorrow.’ What I think needs to happen is understanding the engagement and the types of conversations people have around Apple, and then customize that tweet for them,’ he explains.

For instance, if someone is tweeting about iPad apps for the BBC, it would be the ideal opportunity to tell them about a new iPad app for Thomson Reuters. This moves marketing beyond the obvious, and shows that a brand is able to engage back and forth with consumers.

‘What we’re hoping to see is a push beyond just this sort of generic, ‘blast the message in front of those people because they happen to mention a brand,’ to ‘how do we create a level of engagement that’s of value?’ Joel says.

Geoffrey Rowan, partner and managing director or Ketchum Public Relations Canada, agrees that it’s not about promotion so much as it is about building a relationship with the consumer. Twitter is a natural extension for public relations, as it gives clients a direct connection to a specialized audience, and is regularly used in PR campaigns for brands and advertisers.

Rowan says he sees the new model as another opportunity to extend ‘earned’ media to ‘paid’ media.

‘What we’ve traditionally done in PR is earned media, but more and more we are crossing that line and extending the conversations that we earn with paid media,’ he says. ‘A company like Starbucks has a great following that is earned just because it manages its Twitter feed, but now it can extend that with the paid model,’ Rowan tells MiC.

This extension, however, can only be accomplished if a brand is already active in the social media realm, as the three brands involved with the launch are.

‘While [promoted tweets] allow brands and promotional campaigns the opportunity to garner more attention and execute more creative marketing opportunities, it does not change the fact that they need to be active in the realm if they want to yield the strongest possible results on this platform,’ says Justin Young, managing director, Radar DDB Vancouver.

Even though it is a paid service, Twitter wants to distinguish itself from traditional search advertising by emphasizing that its promotional tweets are ‘organic.’ According to its blog, the difference is that promoted tweets are already part of Twitter. But Joel says the attempt at distinction is really arguing semantics.

‘It’s search-driven, it’ll be at the top and it’ll be brands. You can definitely layer this up against the mirror of Google AdWords and see the similarities. But again he with the most relevance wins. This is simply going to become a game of engagement,’ says Joel.