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Twitter has come up with a new business model after 4 years of existence – the “promoted tweets” feature. According to this feature certain tweets will act like ads and will be displayed on search results with a different background. Later this feature is expected to extend to user feeds and other third party clients (TweetDeck, twhirl, TwitterBerry and Tweetie) as well. This ‘ad’ which is just a tweet can be re-tweeted and replied to like regular tweets. Unlike Google, Yahoo and the rest, there will only be one ad per search result.

How does it work?
Marketers can bid and buy a certain keyword based on the CPM model. Regular twitter users will continue to tweet and re-tweet and only popular tweets get a high ‘resonance.’ Tweets with low resonance will disappear from the search result. Basically users decide which tweets ‘resonate’ with them.

What we think?

For starters, Twitter required a   revenue model and something like  this had to happen sometime or the other. Initially amongst twitter lovers, there will be some kind of a dissonance since twitter was untouched by advertisements and the first reaction that comes to the human mind is that it will be obtrusive. Keeping all this in mind, the ads are initially rolled out only to the search results with only one ad per page.

The best feature of the ads is the “resonance” metric. This was the most influential people on Twitter will continue being influential and will hold greater power. Of course marketers could approach celebs and other influencing tweeple to resonate tweets, but the command to let Twitter stay as is with minimal influence from marketers is very much in the users’ hands.

So marketers can really differentiate between ads and regular tweets and spamming can go down massively if this feature is used sufficiently well. Also considering that only one ad is displayed per page, advertisers need to spend a fair bit of effort before deciding which keywords to buy – which indicates which conversations to follow and analyze the long term impact of the conversations.

Also interesting!
There is another interesting development in the field of Twitter Search – the third party service called TweetUp, launched by Bill Gross. TweetUp will organize tweets according to popularity based on re-tweets and the clicks on the links.

Gross says that Twitter’s own ads plan will not really make any difference to his service, but it will be very fascinating to note which one the users will adopt – both or neither!

Further Reads
Altimeter’s analysis

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