Twitter's 'Jerry Maguire' epiphany? Treat ads as content

By Claire • NewsCred Blog • Mar 02, 2012

Some are hailing 2012 as the year of Facebook Commerce. If Twitter has anything to do with it, these forecasts might have to be rewritten.

As an article, "Twitter: The Startup That Wouldn't Die," in the March 5 issue of Bloomberg Businessweekdetails, Twitter, the social media company of hashtags and handles, is becoming a viable contender in the advertising market.

"During last year's Super Bowl, 8 out of 42 TV advertisers included a Twitter hashtag in their commercials," writes Brad Stone in Businessweek. "Last year, only one, Audi, did so."

Just 18 months old, Twitters advertising arm logged $260 million in ad sales in 2011. The company expects to do even better in 2012.

"2011 was the year we began scaling it," said Staya Patel, product vice president, of Twitter's advertising arm. "And 2012 is the year when we demonstrate it's a juggernaut."

Through the company has been less ambitious about monetizing its site (CEO Dick Costolo says he has no immediate plans to take the company public), the social nature of Twitter puts the company at an advantage. What Costelo calls the "atomic unit" of Twitter's ad strategy, the "promoted Tweet," outperforms competitors like Google and Facebook by a wide margin. The engagement rate of a promoted Tweet is between 3 and 5 percent. With its new premium ads, Facebook expects to derive a click-through rate of .049 percent. For a regular banner ad, the click-through rate is .1 percent.

The crux of Twitter's success, Stone writes, is their approach to ad placement. Rather than placing ads alongside content, Twitter treats ads as content.

[Bloomberg Businessweek]

Photo: Jeffrey Turner/Flickr


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