Guest Posts, Social Media Tools

Is Twitter Advertising a Threat to PPC?

Guest post by Shannon Suetos, an expert writer on phone systems based in San Diego, California. She writes extensively at Resource Nation.

Back in February of 1998, Jeffrey Brewer of Goto.com first presented the concept of pay-per-click advertising (PPC) at the TED conference. Google started implementing search engine ads in December of 1999, and by 2002 PPC had evolved into the major industry we know today.

But does PPC now have a new competitor?

“We’re definitely beyond the experimentation stage. We feel like we’ve cracked the code on a new kind of advertising — advertising that starts out as organic content,” said Dick Costolo, Twitter CEO.

According to the New York Times, “Advertisers will soon be able to pay for Twitter to suggest that people follow their accounts, and next year, Twitter advertising will expand to small businesses, which will be able to place ads using a self-serve system.”

Numbers Don’t Lie?

On average, PPC ads generate clicks for approximately 20% of searches (depending on who is reporting the data). Costolo is reporting that Twitter’s initial promoted tweets are being clicked on 5 percent of the time. While that may seem like a small amount of clicks, the fact that Twitter ads are actually content that is imminently shareable is a big differentiator.

Also, the fact that Promoted Tweets are self-fulfilling in their popularity is an important wrinkle. If the ads don’t generate significant clicks and retweets, they are removed from the system, in favor of tweets that are more popular and trigger viral sharing. This is similar to the way Google shows PPC ads in an order based not just on per-click bid, but also click-through rate, relevancy, landing page speed, and other factors.

This commitment by Twitter to ad relevancy should alleviate some of the inevitable blowback from users about the company “selling out” to advertisers. Ads disguised as interesting, shareable content are more like product placement than insufferable promotions.

Early reports on Twitter’s ad model are glowing. “80% of the companies that tried Promoted Tweets did make a second buy. And, as Costolo told AdAge recently, the click-through rates on tweets are 5%, a number that’s much higher than the 1% a standard display ad on the Web sees today,” reports Read Write Web.

What this Means for Marketers

Maybe we shouldn’t be comparing Promoted Tweets and PPC ads, but rather Promoted Tweets and banner ads?

In 2011, Twitter will begin offering a “self-serve” advertising system that will be easy for small businesses to use.

Paying for Followers?

If Promoted Tweets aren’t your cup of tea, would you pay to get more followers? Companies can now pay Twitter to “recommend” them to other users, based on presumed similarities of interest and topics.

Are you ready to start advertising on Twitter?