After building up a following of about 19 million active users, Twitter has finally revealed their plans for capitalizing on that massive audience. Company co-founder, Biz Stone, announced in his blog post this morning about Twitter’s new “simple” ad service – “Promoted Tweets” – to boost their company revenue.
Promoted Tweets are ads that will be shown on the top of the search pages that Twitter members use to find other members. There is nothing original in Twitter’s model. Facebook and Yahoo! are already gaining significant revenues from advertisements targeted at their audiences.
It should come as no surprise that Twitter has had no problem in attracting major advertisers to their site. The first wave of advertisers includes Bravo, Red Bull, Starbucks and Sony Pictures. You can expect many more big names to be added to this list shortly.
Of course, Twitter’s fan base has enjoyed the site so much because- in part- the site wasn’t crammed with advertisements. Twitter users must be asking themselves, “Will these promoted tweets be at all helpful for online businesses? And “Are these advertisers going to be haunting me every time I ‘tweet’?”
Here is an excerpt from AOL Daily Finance explaining the issue:
Many companies already use "tweets" on Twitter to promote their products and services, so the new program is a logical extension of that. But the new Promoted Tweets may annoy Twitter users. It is one thing for a company to use the standard "tweet" system to talk about their goods and services. It is quite another for ad messages to appear out of this system and on the top of Twitter search pages.
Twitter will face the same problem that Facebook did when it first launched its advertising program. Users will wonder if they are being targeted by advertisers who track their behavior on the site. This, in turn, may cause members to attack the ad messages and Twitter management.
But Twitter had to find a way to make money. The company is four years old and has not yet put together a plan to make itself profitable. This has raised questions about the firm's valuation, which some estimate could be as high as $1 billion.
We understand that Twitter needed to start making money for their business, but will this make Twitter users rebel? Was this a good business plan to go with?
Think about it, though. Even in an extreme case where 50% of Twitter users were to jump ship - that still leaves a staggering of 9.5 million, an audience that advertisers would be thrilled to reach!
Do you use Twitter? How do you feel about it? We’d love to hear your views!
To read the full AOL Daily Finance Article, Click Here.