Tweet tweet! Twitter Ads on the Loose!

Twitter may have 106 million registered users. But can it make money? That question has plagued the microblogging service since its inception over three years ago.

On April 13th the company revealed a much anticipated advertising campaign that aims to make big bucks for the blogging service. The company needs cash to take it to the next level. So far, the hugely successful service has focused on funding from venture capitalists, instead of pinching profits from its massive audience. The trick will be to show that its valuation is valid, while protecting its network of over 100,000 applications currently available. Its latest round was valued at $1 billion. CEO, Evan Williams claims that the initiative will boost Twitter’s “entire ecosystem.”

Social marketing gurus say that by nature, Twitter’s service is hard to monetize. The margins on increasing communication via 140-character “tweets” isn’t quite as cut and dry as your corner lemonade stand. Twitter execs are treading carefully. Currently, advertisers like Starbucks and Virgin America are only allowed to place “promoted tweets” which show up at the top of results lists. This tactic is modeled after Google sale of sponsored ads to the right of searches, based on keywords. All the promotional tweets will be “resonance tested” that measure how often they get a reply or are forwarded to other users. Advertisements that are unpopular with users will be removed. Analytics that quantify the returns on those types of online marketing mechanisms is crucial for companies, and not easy to come by.

The next phase of Twitter’s commercialization will involve promoted tweets on third-party apps and posting them next to individual users’ tweets. Twitter is wary of incorporating ads too quickly and has received criticism from users urging the company not to “pollute” their thoughts. While threats of leaving are not unfounded, unless there is a massive upheaval, the company will push onward.

Skeptics of the campaign claim that Google’s ads are successful because its users are often looking to make a purchase. They say Twitter’s demographic does not target shoppers, but I have personally read reviews of a product on Twitter and gone straight to the company’s website to purchase my new toy. Testimonials are the most effective form of advertising and tweets shoot them out at a mile a minute in short bursts. While Twitter is taking a risk, it’s time to put the tweets to the test!

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