Twitter’s Highly Admirable Ad Platform

We’re glad. Twitter said no to big and ugly display ads. Instead, it has smartly incorporated ads with its search and tweets.

Its resonance metric, which the micro-blogging site didn’t explicitly state on how it works, also acts as a gatekeeper to ensure ads are relevant to users.

We admire Twitter’s approach toward monetization but questioned its effectiveness when it was first announced.

It wasn’t too long before our questions were convincingly answered. Early adopters are chirping the new advertising platform’s praises. Virgin America, enjoyed huge success. After it’s Promoted Tweets campaign went live, the airline recorded its fifth-highest sales day in the entire airline’s history. It’s amazing, really.

In an interview with Adweek, Twitter’s COO, Dick Costolo said:

“They (display ads) can only get so big and take up so much of the page,”

Costolo said of recent efforts to give brands more space on Web pages. Too often, startups rush to adopt existing ad models, he said, a point made earlier in the day by venture capitalist and Twitter backer Fred Wilson.

“They maximize short-term revenue at the expense of long-term health of the platform,” Costolo said.

Promoted Trends increase conversation around a topic by 300-500 percent, according to Twitter. For its Promoted Tweets product, Twitter reports engagement rates—defined as a click on a link, reply or retweet—of 5 percent on average for campaigns.

“Even if you attribute 50 percent of that to novelty, the rate is really high,” Costolo said. To date, about 40 brands have run ad campaigns, with an 80 percent renewal rate, according to Costolo.

After rolling out Promoted Tweets and Trends (with Paramount Activity 2 as the latest advertiser), Twitter plans to roll out Promoted Accounts to complement its existing account recommendation.

Catch this video if you’re ensure what Promoted Tweets are 🙂