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Monetizing the social web: advertisements on Twitter

Several websites announced the news that Twitter is going to put ads on its website (here, here, and here ). So far the website hasn’t created any revenue for its investors and many people predicted the necessity of an ad system months ago. The new system will put so called ‘promoted tweets’ on top of search results and eventually in Twitter streams of users. The valuation of the advertisement will be a combination between Google Adwords and Digg ads. The more an add will be retweeted, added as favorite or clicked on, the more valuable an add will be and the more an advertiser has to pay. Bad advertisements will be removed from the service which encourages companies to make appealing ads.

Twitter Adds ads (from nytimes)

But what makes Twitter users click a targeted advertisement. Most top-ten lists about social media preach authenticity and being honest to your followers as the most important traits for social media use, so Twitter has to convince it’s users that the advertisement actually adds value to their Twitter usage instead of just spamming their conversations. This aspects makes it much more difficult for services as Facebook and Twitter to make money from ads, especially if you compare this business model to Google.

Google became big of selling advertisements next to search results and Internet users accepted or even used these postings. With the rise of Social Media however the internet became more social and with that more private, so although users are willing to share their content with their own network it’s much harder for Twitter and Facebook to give good reasons in their policies to share users’ content with the world, and to breach in their ‘private’ conversations. Twitter has to come up with ways to serve appealing ads which can be distinguished from other results. Who assures me that positive postings on Twitter aren’t part of an promotion campaign?

So the success and future of Twitter depends on the acceptance of ‘promoted tweets’ by its users. And with upcoming competition from both Google (Buzz) and Facebook in the ‘real-time’ so called social streams, Twitter has to make their promise come true: “It will be fascinating. Non-traditional. And people will love it… It’s going to be really cool.”.