Yesterday’s big news that Twitter is finally unveiling a revenue model has been greeted with a flood of digital ink. “Promoted Tweets“, or “paid placement” of advertiser’s content in user’s Twitter streams will work like this:

“Promoted Tweets… will show up when Twitter users search for keywords that the advertisers have bought to link to their ads. Later, Twitter plans to show promoted posts… based on how relevant they might be to a particular user.“

In other words, it’s like Google AdSense in that as an advertiser you buy keywords and as a user you are served up paid messaging that is (theoretically) along the lines of what you were looking for. This format puts brands in a position to be a part of the conversation by inserting them in a user’s Twitterstream. Twitter will also be measuring what they are calling “resonance”, a mashup of nine metrics, among them impressions (eyeballs), shares (retweets), engagement (@replies) and CTRs (clicks). If a Promoted Tweet doesn’t meet a certain level of resonance, it will be dropped and no longer served up to users. I’m a little iffy on that last part, however, because to me it dis-incents the creation of compelling (successful) content and just encourages advertisers to throw whatever at the wall to see what sticks (ie: f your content sucks and simply adds to the noise, who cares; you don’t have to pay for it) I have a feeling that last could end up being a problem for Twitter, because as we know, spam kills all networks, and this does encourage spam.

image courtesy of AdAge

So – jump in or wait it out? My esteemed colleague at the Dachis Group, Peter Kim, suggests waiting it out, because “Advertising on social networks has a poor track record.” I’d like to very respectfully disagree and/or qualify that statement. Using traditional advertising content and approaches on social networks has a poor track record, but in our experience with programs across a number of paid conversational/social marketing platforms, social ads have an incredible track record by any standard. In some cases we have seen CTRs as high as 4%, with averages around 1%, for much of the content we have tested (that’s a 10-40x improvement over traditional display).

Experimentation is the key to innovation, but you need to remember that it is a scientific process, methodical and seeking to prove a thesis. In our work with paid conversational marketing, we do A/B variable testing on images, text and content to see what resonates best with any given audience (and each platform has its own peculiarities), nimbly adapting and learning if we start to observe trending in one direction or another. All of our pilots have been followed up by detailed reporting and analysis that has surfaced incredible insights, providing us with roadmaps for success across a number of platforms. Because of our disciplined approach to experimentation, we have “cracked” the factors for success and exceeded average platform performance by a wide margin in each of our pilots.

Who needs experimentation? Every advertiser who feels that their traditional display/print/broadcast is becoming less and less effective as a means of gaining our attention.

Last time I checked, that was pretty much everyone, and wouldn’t you prefer to figure it out before your competition does?

And now I’m going to tease you about an upcoming announcement. We’ll have some news about our conversational marketing initiatives next week that I think you will find incredibly valuable. Watch this space for more details.