Twitter Promoted Tweets – Paying for Hashtags?

Twitter is going to finally cash in on its popularity with the unveiling of the Promoted Tweets on Tuesday.  While this answers the age old question of if Twitter ever capitalize, it raises a whole bunch of other questions.  Promoted Tweets are advertisements twitter style as they will appear atop of a user generated search as a tweet regardless when the “ad” was generated.   They will function the same as a tweet where the user can retweet, reply and also favorite the promoted tweet but state in small type who the advertiser which is highlighted in yellow when the ad is rolled over.

Dick Costolo, Twitter’s chief operating officer says:

“The idea behind Promoted Tweets is that we want to enhance the communications that companies are already having with customers on Twitter.”

How do Promoted Tweets Work?

Advertisers initially will bid on keywords on a cost-per-thousand (CPM) basis and there will only be one promoted tweet that appears per search/keyword match. Bidding wars will increase the cost as with any paid advertising so for competitive keywords, get ready to open your wallets. The one ad exclusivity will be modified as Twitter is already developing a performance based model, resonance, which analyzes the promoted tweet in areas such as click-thru rate, retweet, favorited, etc. If the tweet is not performing up to snuff, it is removed and the advertiser will not incur further costs for the ad.

Affect on Users.

These more than likely will not affect many users as they are only being rolled out on the Twitter.com website and not any third party sites like  HootSuite or TweetDeck . However this will change and at some point, ads will begin appearing in your individual twitter stream even if you are not following the advertiser.

Paying for Hashtags?

Advertisers select keywords that they wish to bid on which at first will only appear on the search stream. Now, we know that if you are peforming a search the results return tweets with the searched term as a hashtag (and also just the word).  We use hashtags to follow and track tweets, so really isn’t the advertiser paying for hashtags or better said to appear atop of hashtag searches? Twitter knows how many times a term appears and also what was searched and how many times which is their point of reference for the bids in the CPM model. Is this a case of  tomato/toe-ma-toe or do hashtags not even play a role?

While there have only been a few takers including: Best Buy, Bravo, Starbucks & , covering which the most popular industries, we just may see many more popping up.  Although, with the ads only appearing on Twitter.com, I do not think that there be a mad rush off the third party twitter clients to run over to search for the ads.  Failed whale would for sure be the trending topic!

What do you think – good or bad idea to have ads show up in search streams?  What about appearing in your stream unsolicited?

photo credit: AdAge