Twitter Finally Unveils Its Ad Model

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After months of anticipation, Twitter has unveiled an ad model allowing marketers to drive more attention to their Twitter stream. Called Promoted Tweets, the new ads consist of ordinary Tweets that appear to a wider group of users - initially only on Twitter's search results pages.

The first phase of the program includes a small number of advertisers, including Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks, and Virgin America.

Behind the monetization scheme is the assumption that some marketers - eager to highlight their own activity on Twitter - will pay for greater exposure to people who have already expressed interest in related keywords.

"We strongly believe that Promoted Tweets should be useful to you. We'll attempt to measure whether the Tweets resonate with users and stop showing Promoted Tweets that don't resonate," founder Biz Stone wrote in a blog post early this morning. Twitter will decide which ads resonate by analyzing retweet, reply, and favorite activity. Those that do not will be removed from rotation, and advertisers will presumably not pay for them.

In that regard, Promoted Tweets are akin to the concept of a quality score for search advertising. Quality score, first engineered by Google, aims to maintain the relevance and effectiveness of ads by removing those that don't provoke a minimum number of clicks.

According to the New York Times, initial advertisers will pay for the ads on a CPM basis. Future payment models will depend on how users and advertisers use Promoted Tweets.

After gathering data from the initial phase of the program, Twitter intends to expand Promoted Tweets to other pages - including its users' regular Twitter streams - and to Twitter clients such as TweetDeck, Tweetie, and Seesmic.

Aside from being labeled "promoted," Twitter's ads will behave in a manner similar to other Tweets. For instance, they will be automatically sent to people who follow a brand, and will be annotated with the usual Twitter functions: replying, retweeting, and favoriting. Twitter said only one Promoted Tweet will appear on a given search results page.

Twitter announced its ad platform one day after another company, TweetUp, announced plans for a similar Twitter ad targeting approach. The concept behind TweetUp is to offer Twitter widgets to a network of partner Web sites, including Answers.com and PopURLs. One of those widgets will consist of a search bar for Twitter, and will deliver Twitter-based ads targeted to keywords. The other will be an on-page widget with organic content and ads targeted contextually to the page a user is viewing.

TweetUp has backing from Jason Calacanis, Jeff Jarvis, and AOL founder Steve Case's Revolution LLC. Overture founder Bill Wise is helming the company as CEO.