I’m still not sure if the Twitter stream is the right place to be for advertising, but with the way the company set out to make it easy for developers to build upon their platform with open APIs, it’s no wonder so many ad networks have sprung up since it got started. Its massive growth and the fact that the San Francisco startup is a media and celebrity darling probably helped in that regard, too.
One of the companies that is dabbling with advertising on Twitter – even if Biz & co seem to be reluctant to do some serious testing of their own – is Ad.ly, an LA-based startup that launched about a month ago.
In essence, Ad.ly aims to link up high-profile advertisers with celebrities on Twitter and distribute links to marketing campaigns through the celebs’ tweet streams with full disclosure.
The model is pretty straightforward: the celebrity (or publisher) gets a lot of cash in return for a couple of messages that are under 140 characters, and Ad.ly takes its cut.
As my colleague Leena Rao wrote upon Ad.ly’s launch:
Each publisher sets the price of a Tweet campaign but Ad.ly will give the publisher a pricing suggestion based on variety of metrics. Ad.ly’s proprietary algorithm evaluates follower counts, authority, quality of Tweets and will help determine the Twitter’s value. And when I say that celebs get paid “handsomely,” I mean it. If a celeb has above a million followers, each Tweet gets in the five figures, with multiple Tweets about a product netting the celeb a six-figure reward (yes, for four Tweets!). Ad.ly takes a cut of what the celeb makes, but Rad wouldn’t reveal what the percentage is.
That’s a lot of money for tweets, so time will tell if it’s a sustainable model, if celebrities keep signing up and using the service and if Ad.ly will be able to pay their promised dues. But some investors are bullish on the potential, at least.
Yesterday, GRP Partners’ Mark Suster wrote an interesting blog post on the topic of VC seed funding. In the post, Suster reveals that GRP Partners, where he is a General Partner, has just closed a $500,000 seed round for Ad.ly and that he’d be interested in leading or joining follow-up VC financing rounds if the startup keeps performing well.
A couple of weeks ago, Ad.ly even hired a West Hollywood PR and marketing firm called Entertainment Fusion Group to be its ‘Agency of Record’; EFG will help the fledgling company with public relations and talent procurement. Since it’s deeply embedded in the entertainment industry, the firm should help Ad.ly get some exposure within the circle of movie stars and other celebrities.
So what gives? Has Ad.ly, with its focus on high-profile advertising partners and celeb Twitter users with a large number of followers, cracked the nut of Twitter advertising? Impossible to say without seeing some numbers, but it appears to be striking a chord or two.
Not that Ad.ly is the only one trying to capitalize on Twitter’s growth and celebrities’ massive audience. SponsoredTweets (from IZEA) does much of the same, and then there’s ExecTweets, a cooperation between Microsoft and Federated Media. Others, like Be-A-Magpie and Twittad, have their sights set on the long tail of Twitter.
Whether you think of it as stream pollution or an innovation social media monetization, Twitter advertising is here to stay, for better or worse. And you can rest assured many of these ad networks are going to run a profitable business way before Twitter does. The flip side of that coin is of course the fact that all of rely on the Twitter platform, so if they prosper or perish is partly Twitter’s call.
They would be better off creating ad campaigns and tagging them to Twitter accounts and then syndicating those ads out to the Major Twitter clients.
That way when someone is receiving an update from a celebrity via a client the client can simply serve that ad feed. I am sure that would be a lot easier than signing the celebrities and going through the whole disclosure inside the tweet.
The problem – people dont subscribe to twitter feeds to be feed advertising from celebrities. they will quickly unfollow celbs that just consistently feed them advertising crap which I would imagine would be antithetical to the entire point of a celb being on twitter. the whole point of getting on twitter is become MORE popular with their fan base – not ostracize it with advertising crap.
Celebs are known to plug various products on all types of other mediums (William Shatner and Priceline is one of the more obvious ones on Twitter) so I think Ad.ly might be on to something.
As for the long tail, it seems to work well when the ads are targeted to the topic of the Twitter account. The CTRs are actually surprisingly good when the ads are relevant to the content being pushed out of Twitter. I’d be happy to share our stats if interested.
Disclaimer: I work for Assetize, a Twitter Ad Network
Twitter advertising will continue to grow as companies slowly test out the waters and see the results.
Twitter advertising now has the single fastest response time above all other forms of advertising. Nothing can really even come close. It is instant response on the highest level. One sponsored tweet from just one person can get you instant clicks within seconds, sign-ups and or sales within seconds.
The closest as far as response time would be TV infomercials where users are calling in close to real time, but it still takes a few minutes of watching the pitch before potential buyers will call to buy. On twitter the window of clicks on a single tweet is from 1 second up to around 4 minutes til the clicks die down.
Instant clicks within seconds to any specific target URL.
What else compares?
Maybe, but it doesn’t make it congruent to tweet readers expecations. Once people start to smell the spam, its game over.
That’s a good system. I don’t think it annoy followers if an ad-tweet is shown in every 40 or 80 tweets.
Since this system depends on Twitter platform, it like its life is in the hand of Twitter. Twitter can either acquire Ad.ly or develop its own ad-system to replace it.
never as bad as the facebook platform (even more unpredictable) where your business is in facebook’s hands.
This is in the same ballpark as TShirtAds, although they don’t have a celebrity category as far as I can tell.
The whole key is not annoying your followers – big risk of alienating your fan base I think.
The problem with ad.ly is the prices are too high…
initially they may be able to convince some big agencies but in the long run they cannot as the ROI is not there for the advertisers.
Said this i think twitter ads can work but the ad prices has to reflect the value!
There are many case studies on the web that show “pay for celebrity” does not work. When an advertiser pays 6-figure for a tweet equivalent to 10s or hundreds of dollars per click, will he return?
What matters is pay for performance and ROI. That’s what we do at Revtwt. Check this comparison http://www.alex...soredtweets.com
we are bigger than any of the competitors you mentioned.
As GP said, the ROI does not add up for this model. There are multiple case studies on the web that shows that the “pay for celebrity” model does not work. At 6 figures a tweet and possibly tens or hundreds of dollars per click, how many advertisers will return?
What matters is pay for performance and ROI to the advertisers. That is what we do at Revtwt.com. Go to Alexa and compare us and all the competitors listed in the post, you will see we are bigger than all of them.