Twitter allows advertisers to target users directly in bid to increase profits

Thursday, August 30th 2012. | Internet News

Twitter will begin allowing advertisers to directly target users based on the interests they reveal in their tweets, the social media company has announced.

The move will see Twitter, which carries 400m messages every day, actively sift through what each user is reading and tweeting to discern every account holder’s interests.

The company hopes to catch up to other internet brands that have had varying degrees of success in using technology to serve better-targeted ads.

For years, Google has made huge profits by displaying ads based on what a user looks for in its search engine, while Facebook encourages users to proactively mark their “likes.” Twitter, by contrast, has long faced the challenge of indirectly inferring these preferences, something that marketers find less attractive.

In an effort to draw advertisers, Twitter also slashed the minimum price of “promoted tweets” from 30p each to just a penny.

CEO Dick Costolo has said in recent months that his company’s value lies in its ability to mine its flow of information to build “an interest graph” showing its users’ preference profiles – which could be used by marketers to deliver targeted and relevant ads.

Twitter will now allow advertisers to send paid ads, in the form of tweets, to users who are interested in any of the roughly 350 topics on a list curated by Twitter itself.

For instance, sportswear retailers can target football fans for promotions, or film distributors might send tweets to Bollywood fans.

The new offering will allow companies to reach a “very narrow, very specific and incredibly focused audience,” Kevin Weil, a Twitter director of product management said.

Twitter engineers believe they can build a compelling ad delivery platform, particularly if marketers craft ads that seem to blend in with the tone and format of the service’s flow of tweets, which are seen by some 140 million active users every month.

Twitter analyses “a host of signals,” Weil said, including which accounts a user follows, as well as the subjects of tweets that are most frequently recirculated or replied to by the user.

The company’s data closely evaluates the latter, giving “a direct measure of what you’re interested in,” Weil said.

Between 1 and 3% of users who see a “promoted tweet” – a paid ad – click on the tweet in some way. But early tests have shown the engagement rate to be higher when tweets are directed using its new targeting tool, Weil said, while declining to discuss specific results.

Slashing the minimum price for ads would allow more brands to advertise but it did not reflect a lack of demand from advertisers for ads on the platform, Twitter said.

Valued at more than $ 8bn (£5bn) but expected by analysts to make less than $ 300 million in revenue in 2012, Twitter has aggressively ramped up its advertising capabilities. But in streamlining its product to better show ads, the company has cracked down on how third-party services may use its content, sparking an outcry from Silicon Valley technologists who would like Twitter to remain a neutral media platform.

In protest against what they viewed as a Twitter experience increasingly corrupted by advertising, software developers in California this month launched, a Twitter-like rival that is supported by a $ 50 membership fee rather than ads.

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