Yesterday at the top of their business FAQ Twitter posted a quick walk through video about how Promoted Tweets work:
OK I’m excited…. I have money and a product how much does it cost?
Q. How much will it cost to promote Tweets? Will advertisers use a cost-per-click (CPC) model or something else?
A. We will use a simple impression-based pricing model until we, and our partners, can better understand the value of promoting Tweets. We haven’t decided on the right model going forward but we will be measuring multiple indicators of engagement such as Retweets, @replies, re-use of hashtags, avatar clicks, hashtag clicks, in-Tweet link clicks, views after Retweet and more. We call these collective indicators “Resonance” and believe that over time a pricing model based on Resonance will be better tuned to the actual value of promoting a Tweet than simple cost per click or dollars per friend, fan or follower models. We’ll know more after our initial launch and look forward to working with our advertising partners in refining our thinking around pricing and Resonance.
I have several contacts at twitter and none of them would give up a price anyone is currently paying but they all said the CPC price needed to back out to about $20 CPM. So depending on how hot the chick avatar was you promoted and what she said your price could drastically vary CPC.
So where do I sign up?
Q. How will companies use the platform? Where do I signup?
A. We are providing a self-serve dashboard to companies using Promoted Tweets. There will undoubtedly be some rough patches during the early going, so access to this dashboard will initially be limited to a handful of advertisers. As the tools become more robust, we will gradually open up the platform to other advertising partners.
Fluff filtered version: We have no clue what we are doing but we know big brand companies want to blow tons of money advertising with us. Right now we are only working with companies large enough they don’t care if they get a return or not. They just want to look cool being a part of twitter.
Users get the shaft:
Oh ya and I was right in my original assessment. Users of twitter… who actually create the content will receive 0% of the revenue if their tweet is chosen to be promoted. This is the first advertising model I can think of where the user who is creating 100% of the content being paid to advertise is getting zero percentage of the revenue.
Yes, thats right, you tree huggers, who said you would never sell your Tweets. Twitter is going to put your content up for auction and there is nothing you can do about it.
Ok but lets say I am Google and I am showing trending topics and allowing searches on twitter. Can I get paid?
Q. Will you syndicate these search ads to third parties?
A. Absolutely. We will syndicate Promoted Tweets to third parties in the Twitter ecosystem.
Q. Will third party apps be able to run and make money on these ads?
So that’s interesting. Twitter is going to provide a search feed much like overture, infospace and the like…. This opens up all kinds of doors (and volume).
So whats the Shoestradamus prediction on the future of twitter advertising?
Well… Twitter is sitting on a MOUNTAIN of venture capital money and does not need to turn a profit anytime soon. As I alluded to above companies are swooning at the chance to throw money away to be a part of twitter in any way shape or form. We also saw a similar love affair with Facebook when it first started taking money for homepage buys.
Right now Twitter is in a very fortunate position. But its not going to last…. and when they do open up the flood gates… look out.
Lets say you were promoting ACAI Berries and bid on Oprah as a keyword. Then anytime someone searched for Oprah or if Oprah made it to a trending topic… well I don’t have to tell you how well that would probably work.
The earlier you can get in on this the better. Its going to be rough but much like every other advertising platform ever the people who got in early and found loop holes in the system did really… really well. But it will be a painfull learning curve.