Twitter Finds Its Business Model

Twitter announced today that it will be rolling out paid advertising, known as Promoted Tweets. This move is meant to bring in revenue and put a stop to questions about “What is Twitter’s business model going to be?”. COO Dick Costolo will discuss this offering in detail at today’s AdAge Digital conference and tomorrow at the official Twitter developer conference, so we can expect to hear much more about Promoted Tweets in the coming days.

Promoted Tweets are not traditional advertisements. These are organic tweets that brands want to promote to a wider audience. They act just like normal tweets which appear in your timeline, but they will be clearly marked as “promoted” and will gain special placement at the top of some search results pages. Think of it like paid search advertising, but your status update takes the place of ad copy. Only one Promoted Tweet will appear on a search results page at a time and, if the tweet does not “resonate” with users (measured in the form of replies, retweets, and favoriting), Twitter may stop displaying it. Promoted Tweets must also be timely, delivering information that’s relevant to what's currently happening.

This new advertising system will be unveiled in phases. This will allow time for Twitter users to get used to seeing Promoted Tweets and for Twitter to develop a system that pleases both advertisers and users. Initially the Promoted Tweets service will only be available to partners, including Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks and Virgin America. Over time the service will be available to other advertisers and Promoted Tweets will begin to appear outside of the Twitter search results.

What does this mean for brands? Twitter is putting a premium on the quality of its user experience. If you were hoping for an easy way to promote yourself on Twitter without having to invest in the community, you’re out of luck. You can’t just “buy Twitter ads” and be done with it. Once Promoted Tweets are available to all advertisers, you will need to maintain an active Twitter account and post engaging tweets that can then be featured through this system. Promoted Tweets can also be used for proactive reputation management -- if your brand needs to get out in front of a conversation (for instance, respond to inaccurate or negative media coverage), this will be a great way to make sure your messages are front-and-center for other Twitter users to see.

Did Google Just Get iPwned?

“Search is not happening on phones.” When Steve Jobs speaks, hyperbole follows. Based on their acquisition of AdMob which is currently being challenged by the FTC, I think Google would probably disagree with that statement. In the world of mobile OSs, though, Google’s Android is second fiddle to the iPhone by a large margin. Apple dominates Google in this environment almost as much as Google dominates Yahoo in the PC-based search engine competition.

“People are using apps, and this is where the opportunity to deliver advertising is.” So the announcement today that Apple is building “iAd” into the iPhone 4.0 operating system, which will be available for iPhones in the summer and iPads in the fall, is fascinating. The potential of these in-app ads as demonstrated by Jobs is revolutionary in terms of entertainment and interactivity value. For example, a sample Nike ad had the ability to custom design sneakers, as well as store location services built into it. A Toy Story 3 ad had video clips, promotional artwork (which could be set as the phone wallpaper) and games. I imagine it wouldn’t be too much of a step further to add showtimes and ticket sale capabilities.

In true Jobsian fashion, Apple said there is a potential for over 1 billion impressions per day. Without knowing how much of the ad platform is predicated on multitasking, this may be an over-estimation. The ad content is run without leaving the app that presented it. Multitasking will not be available for the iPhone 2G or 3G or early iPod Touch models.

There’s a lot to still be determined about the ad development and buying process, but from a creative perspective, this could potentially revolutionize and define what mobile advertising will be for years to come.

Will Brands “Like” Facebook’s New Round of Changes?

The social media marketing world is abuzz with word that Facebook is set to change how users interact with Brands on the site. Currently, when a user comes across a company or brand’s Facebook Page, he/she can choose to “Become a Fan” by clicking a link or button. The new format changes the language slightly, invoking an already widely used Facebook function – the “Like” link or button.

The reason for this change, according to Facebook sources, is that users are already comfortable “liking” content on Facebook and do so twice as often as they “fan” something. I think most Facebook users thoroughly understand the current difference between liking content and becoming a fan of a content source, so is Facebook comparing apples to apples here?

“I compare becoming a fan of something to, essentially, adding someone as a Facebook friend,” says Shawn Perry, an avid Facebook user. “I see a huge difference between liking something on Facebook and indicating that I want to continue to see updates about something in my News Feed. I’m curious about how Facebook is going to differentiate between these two activities so that users know what will come of each action they take.”

How will brands and users feel about this change?
For brands that have spent the past 2-3 years building momentum for their Facebook activities, using “Become our Fan on Facebook” and “Visit our Facebook Fan Page” badges on-site and off, there are going to be some rebranding efforts ahead to help smooth the transition. While it will remain acceptible to continue using the “become our fan” terminology, over time it will need to phase out in order to eliminate user confusion.

Pam Abbazia, Manager of SEO and Social Media Programs, weighed in with some additional thoughts:

“At first glance, it feels like a semantic bait-and-switch to use the ‘Like’ button as the opt-in mechanism for Fan Pages. ‘Like’ is a casual act, while ‘Become a Fan’ implies a commitment to receive Page updates in your News Feed. We may see a rash of accidental ‘fan’ opt-ins early on but, as Facebook users get used to the change, it could improve traffic to Facebook Pages and improve overall engagement in the network. A potential downside is, brands may have to work harder to engage fans because there will be more competition from other pages in the News Feed. You’ll need to be special to stand out.”

Facebook hasn’t made an official announcement, so it will be interesting to see how they handle the roll-out. Hopefully, like most of the improvements they have implemented in the past, this change will enhance the relationships brands are building within the Facebook community.