Guest Posts, Social Media Tools

Is Twitter Advertising a Threat to PPC?

Shannon Suetos 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?

Twitter   Search TheWalkingDead Is Twitter Advertising a Threat to PPC?“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?

20 Twitter   Home Is Twitter Advertising a Threat to PPC?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?

Related
  • http://dannybrown.me Danny Brown

    I guess a lot will come down to how they’re promoted, and the individual seeing them (yeah, I know, cop-out answer!).

    Banner ads and PPC ads have never won me over. I see their value and we offer them on projects, but web users aren’t stupid. While that 20% figure quoted may seem attractive, how much was cost and how much was return?

    Users are switching off (mostly) to ads, and looking at organic recommendations and results. I’ve spoken to a ton of folks who’d pay premium to switch OFF the ads :)

    Be interesting to see, but not sold on the overall concept yet.

  • http://www.daviddalka.com/ Dalka

    There is no purchase intent (and therefore lower degrees of relevancy) present like there is in search.

    It should be recalled that @dickc said the same types of things about the potential for Feedburner advertising A) right before the sale to Google and B) it never materialized.

    Some suggest that history on the web goes through repeating cycles, we might be witnessing one here?

  • Anonymous

    Good post and this will sure be fun to watch. Between Twitter, Facebook, Linkedin, as well as Google, all competing for ad dollars, watch out! This will be fun for small businesses, but tough on those companies.

    Jeff Ogden, the Fearless Competitor
    Find New Customers “Lead Generation Made Simple”
    http://www.findnewcustomers.com

  • http://twitter.com/brianfidler brian fidler

    I don’t think Twitter ads are a threat to PPC, the twitterverse is far too small to affect the more omnipresent PPC ad. Google and other PPC vendors may learn some valuable insights by observing the market, but then they can very quickly adapt and add functionality to PPC ads.

    The 5 fold increase in conversions is very interesting but without more data its a little too abstract to use as a benchmark for the success of Twitter ads. It could be that the Twitter audience is more receptive to advertising. It could be that the “newness” is prompting click-thrus. And it could be that their approach is simply better which will spur additional innovation and copying by the PPC vendors.

  • http://www.websuccesscoach.com Demetria

    This is going to be an interesting ride on the Twitter coaster as we enter 2011. I want to see how the self serve advertising system will play out. The 80% stat is a surprise to me…like I said, can’t wait to see how it all unfolds.

  • http://michaeljbarber.com/ Michael Barber

    The Twitter stats are terribly misleading. Their ad ecosystem is still normalizing so a 5% CTR really means nothing until they have a significant amount of data. Like others have mentioned is this thread, the newness factor probably plays a large role, along with the user still trying to understand the difference between prompted and normal tweets.

    Beyond that, the Twitter ad platform will need to mature for major advertisers and mom and pops alike to jump ship from PPC and display. Both channels still provide great ROI when leveraged effectively and provide advertisers with a wide array of features that Twitter won’t role out initially (targeting, conversion tracking etc).

    I don’t see any near term threat from Twitter in relation to PPC or banner advertising for that matter (Facebook is another story). Google sees 88 billion searches per month and those users are looking for something specific. They want to be given relevant results. The vast majority of Twitter users are using the tool for consumption of news, celebrity information and gossip, not to be advertised to. Search will/is getting smarter because of Twitter and Facebook.

    Ultimately, brands will build or leverage apps that target users behaviors across social networks and within search to better reach users who are interested in hearing from them wherever that user may be across the web.

  • Kristen

    I am not surprised by the percentage in this post, but happy to see Twitter adapting to more of the Ad strategies of Facebook. I think each have their own place in the market personally and will be even more excited to start seeing more social media strategy and old school marketing strategy converge.

    Kristen Sonsma
    Chief Business Development Officer
    http://www.bsquareclothing.com
    Be sure to ‘Like’ us at http://www.facebook.com/bsquareclothing
    @bsquareclothing

  • http://twitter.com/WriterChick47 Vicky A

    Personally, I’ve never been a fan of PPC or banner ads. While they may temporarily get my attention, I’m much more likely to purchase and/or follow based on word-of-mouth and reviews from trusted sources.
    I agree with Danny that it will depend how they’re promoted and to whom.

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  • Business Marketing Services

    I think that the 5% CTR is an interesting number, but I’m not sure if this is a threat to other PPC options. I guess that it’s make or break time for Twitter!

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  • Steve

    When we advertise on Adwords, our landing page always has at the very least a very compelling headline, a bullet list of benefits, and a very clear call to action. That can be a button to another page or an email lead capture form or whatever, but I’ve never seen a landing page perform well with any amount of traffic without at least those three elements. So as we’re talking about paid traffic, remember that it’s also the advertising on the page itself too that needs to be optimized. You can hire a conversion rate optimization specialist like Simon if you feel like you need some help with that, his number is 302-401-4478.