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How Twitter Makes Money

ClickZ, 4/26/11

On January 24, eMarketer predicted that Twitter would bring in a bit over $150 million in 2011 and $250 million in 2012. (You can see the chart at the bottom of this column.) Is this realistic? I think it may be from what I have learned and am writing about below.

Twitter’s “Promoted” Products

Recently my firm had a very interesting series of calls and meetings with Twitter and I got my head around all the details of its advertising or “Promoted” products. Twitter’s offerings have three attributes that really struck the value/performance chord in my book:

Cost-per-click from its Promoted Tweets

Cost-per-action (actually cost-per-follower) from its Promoted Accounts

Exclusivity from its Promoted Trends offering (basically Twitter’s version of a home page takeover)

So here is a quick breakdown of what those products are offering:

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The Future of Advertising Has Been Promoted: A New Study

Fast Company, 11/19/10

For years, Twitter focused on building a fervent community while other established and burgeoning social networks attempted to do so while fueling growth with advertising dollars. 2011 will go down in history as the year when Twitter was officially promoted from a micro blogging network to a full fledged interest network, with each of its denizens expressing their likes and dislikes Tweet after Tweet. Combine a highly engaged interest network with the ability to introduce relevant promotions or brands in a way that’s non-intrusive and you have an interesting recipe for fusing a social network with an ad network.

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Marketers Ponder the Worth of Twitter's Ads

ClickZ, 7/20/10

Marketing industry watchers have been quick to tweet about Twitter ad sightings during recent mornings when they’ve spotted either a “Promoted Tweet” or “Promoted Trend.” Big brands like Disney, Sony, cable TV channel TNT, Nike, and Starbucks are among those to have tested the formats.

But, what about the 105 million consumers who use Twitter? Are they noticing those ads? Results from a consumer panel will likely someday shed light on that question. Until then, it’s fair game to wonder how the ads are performing.

“I hope Twitter is doing research because I am definitely curious,” said Ian Shafer, CEO of social media agency Deep Focus. “I am sure right now there is a big early adapter discount going on with that program because no one knows [exactly] what it does.”

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