Open up your mind and say, ahh...

People predicted rioting when Twitter decided to post ads within its feeds. However, those protests never materialized. Instead, Twitter was used to mobilize protests in the streets in Egypt, Yemen and Tunesia.

The two instances are related. As Twitter became a globally recognized entity, it also began efforts to monetize itself earnestly in 2011. As previously mentioned, Twitter’s successful introduction of advertising was one of the big social media marketing trends of the year. Despite warnings from some Twitter purists, users didn’t seem to mind more ads on Twitter, perhaps concluding that Twitter was, after all, a for-profit business.

Growth Via Advertising

Though many perceived Twitter’s 2011 ad rollout as an unalloyed success, eMarketer noted a few hiccups here and there. Twitter’s international expansion took longer than promised, and a self-serve ad product didn’t materialize until the end of the year — even then, for just a handful of advertisers.

Concerns aside, eMarketer is still bullish about Twitter’s prospects in the coming year. The researcher reckons that Twitter will post $259.9 million in revenues in 2012, an 86.3% jump from 2011. Debra Aho Williamson, the author of the report, wrote that although Twitter has a smaller audience than Facebook, marketers have posted “solid engagement rates” with Twitter’s ad products that outperform Facebook’s in some cases. (That’s fairly faint praise, however, since the click-through rates for Facebook are notoriously low. Facebook, however, has sought to reframe the argument by justly noting that CTRs are a poor measure of an ad’s success.)

Twitter doesn’t provide much transparency into its advertising performance, but some partners, notably EA, have touted an 11% engagement rate in the U.K. for a Promoted Trends campaign. Moreover, users don’t seem to mind ad products like Promoted Tweets, according to research from Lab42.

The onrush of advertising to Twitter isn’t just hype. It’s rare that a day goes by in which Twitter’s home page doesn’t sport a Promoted Tweet, Promoted Trend or Promoted Account by one advertiser or another. Twitter doesn’t divulge the pricing for such campaigns, but the Wall Street Journal pegged the price of a Promoted Tweet north of $100,000.

Now that the Twitter ad machine is up and running, the company is looking to expand its footprint. In September, Twitter opened a London office, its first international outpost for sales. That month, the company also began accepting political ads, broadening its variety of advertising.

With the company clearly on a growing path, the obvious question is whether an IPO is in the near future. Officially, at least, there are no such plans. “We can stay private and grow the business the way we want, as long as we want,” CEO Dick Costolo told The Mercury News in December. “We never think about or talk about when we want to go public.” (Twitter could not be reached for comment for this story.) Yet Twitter just bought a fancy new headquarters in San Francisco designed to accommodate far more than the company’s current 700 or so employees.

Possible Complications

Of course, there was once a time when MySpace was the next big thing, and Second Life appeared to be the marketing platform of the future. Twitter seems to be on a tear at the moment, but alas, things change. Though it seems unlikely, there’s a chance Twitter could jump the shark or experience a Netflix-like fall from grace.

How? For starters, Google+ could really take off and, realizing its SEO benefits, users and brands could begin focusing on the network more — at Twitter’s expense. Likewise, Facebook’s addition of subscriptions could usurp Twitter’s role as a celebrity platform. More celebs could follow Ashton Kutcher’s lead by leaving the tweeting to professionals, which would result in a duller experience all around. Brands, assessing the damage that Kenneth Cole and Chrysler suffered due to errant tweets, could decide it’s time to cut losses and shutter their sparsely followed accounts. Finally, Twitter might simple expire like any other fad, as users move on to something else.

Another possibility is that Twitter could get acquired and change in a fundamental way. Imagine, for instance, that Google decided to buy Twitter and absorb it into Google+. The post-IPO Facebook could also be a buyer.

Crazy, you say? Remember that YouTube was once a separate company as well.

While the scenario is plausible, the idea of a new competitor or a group of competitors stealing Twitter’s thunder seems far-fetched. Five years after its founding, Twitter is now a global brand name and a symbol of social media-enabled freedom. There simply will never be anything like Twitter again.

Image courtesy of Flickr, tantek

Twitter continues to impress its supporters and critics alike. With 100 million active users, one billion Tweets published every day, and a fresh round of funding, Twitter’s monetization strategy continues to mature. In addition to licensing deals for its coveted fire hose and a future revenue stream tied to analytics, Twitter’s blue bird truly flies with the help of its expanding portfolio of Promoted products. The company is now releasing its latest offering, and it’s the most controversial product yet. New Promoted ads currently in a limited round of tests, hit streams even if users do not already follow the brand but are “like” those who do. Notoriously conservative in pushing ads to its fiercely loyal audience, this move represents a Mad Men moment for Twitter as it ventures into bold new territory.

The new form of in stream ads are an extension of its existing Promoted Tweets product where ads are placed at the top of the stream if the user already followed the company. Additionally, brands can used Promoted Tweets tied to search to plug directly into the interest graph. The first ad produce released by Twitter helps brands reach people who search for relevant keywords by serving up a promoted Tweet related to the search. Twitter is expected to also introduce self-service products for smaller businesses later in 2011.

Twitter’s other advertising products help brands reach consumers by attracting attention in the active panel that frames the Tweet stream. Through Promoted Accounts, brands can buy an opportunity to increase the number of followers. And, with Promoted Trends, brands tempt users with intriguing words or hashtags to entice click-throughs.

Companies such as Starbucks, Virgin America and Coca-Cola have actively invested in a variety of Twitter’s Promoted products since the beginning and each claim that Twitter’s ads consistently deliver worthwhile performance. Brands continue to line up to be among the first to experiment with these new media buys.

In a marketing world where media is neatly divided into paid, earned, and owned (P.O.E.M.), Twitter forces marketers to think beyond the traditional banner mindset. I spent the last couple of years studying the new opportunities for brands in the new media world and vehicles, channels, and mindsets required to use them effectively. The new take on media was released recently with the help of JESS3 as The Brandsphere. It introduced Promoted and Shared as two new channels to round out paid, earned, and owned. For example with Twitter’s new Promoted product, brands are encouraged to look beyond flashy graphical elements or using images or names of friends as bait. Twitter is carefully monetizing its popular service by requiring brands to lure consumers through clever word play, linked by interests that drive noteworthy experiences. Brands now need to rethink the click-through experience to take consumers on an extraordinary journey to not only perform well, but also reinforce the value of Promoted products as they introduce potential disruption to the precious Tweet stream.

Will Twitter’s new product pay off? Advertisers are certainly willing to give it a try. In a recent study conducted by Pivot, 60% and 32% of brands that experimented with social advertising, including Twitter’s Promoted products, found the new form of advertising very useful and useful respectively. Of those we polled, 93% had deployed social ads on Facebook and 78% on Twitter.

When it comes to consumers and how they feel about Promoted ads in Twitter, Lab42 found that only 10.9% say that they “are annoying and take away from the Twitter experience.” For this moment in time, consumers are open to Twitter’s cautious expansion of new advertising products. In the same study, 24.8% had already reported seeing Promoted ads related to relevant brands. Another 21.6% have received discounts offered through Promoted Tweets, 21.2% found new brands, and 14% have retweeted Promoted Tweets.

If you look at the doors that Twitter’s promoted products open, you start to get an idea of just how far this can go.
Promoted products can reach people based on interest, device, geolocation, behavior, and demographic. Indeed, Twitter’s Madmen moment has arrived. The company must now look at innovating not just how to sell media opportunities, but also work with brands to consistently deliver value and unique experiences that consumers appreciate rather than disregard or revolt against. Here, Twitter’s competition is itself as this is an opportunity that’s theirs and only theirs to win or lose. Even though Facebook is for all intents and purposes a competing network, budgets will continue to fund experiments in both and many other social platforms as brands experiment with reaching consumers where their attention is focused, their social streams.

Prior to the July 4th Holiday, reports that Twitter would soon launch a dedicated stream for special and promotions hit the web. Today, Twitter announced that the @earlybird account takes flight and Disney goes along for the maiden voyage.

@earlybirdoffers Twitter-exclusive deals in entertainment, fashion, technology, beauty, travel and more. For a limited time, @earlybird and Disney Pictures will offer Twitter users a special “buy one, get one free” deal on tickets to “The Sorcerer’s Apprentice,” a new feature film from Walt Disney Pictures and Jerry Bruckheimer Films that opens in theaters today.

This is the second time Twitter has worked with Disney to launch new advertising initiatives. Last month, the interactive duo introduced the Promoted Trends concept with a Promoted Trend for the Walt Disney Pictures / Pixar Animation film “Toy Story 3.”

By Brian Solis: www.briansolis.com