Twitter Prohibits In-Stream Ads

-Twitter Logo-This morning Dick Costelo posted a statement to the Twitter blog announcing that the company would now prohibit in stream ads from third-parties. This will kill off a large number of third-party ad networks which were building business models based on exactly this. More specifically, “we will not allow any third party to inject paid tweets into a timeline on any service that leverages the Twitter API”.

If we’ve read this correctly, that means any other service that uses the Twitter API, such as Tweetdeck, seesmic, or any other company, cannot inject paid tweets into timelines within their applications. This was probably the most obvious business model for many of these third-party applications. While not stated, the primary reason for this is to drive ad revenue to the company’s new ad platform, “Promoted Tweets”.

According to Dick Costelo:

Why are we prohibiting these kinds of ads? First, third party ad networks are not necessarily looking to preserve the unique user experience Twitter has created. They may optimize for either market share or short-term revenue at the expense of the long-term health of the Twitter platform. For example, a third party ad network may seek to maximize ad impressions and click through rates even if it leads to a net decrease in Twitter use due to user dissatisfaction.

Secondly, the basis for building a lasting advertising network that benefits users should be innovation, not near-term monetization. Twitter is uniquely dependent on and responsible for the long-term health and value of the platform. Accordingly, a necessary focus of Promoted Tweets is to explore ways to create value for our users. Third party ad networks may be optimized for near-term monetization at the expense of innovating or creating the best user experience. We believe it is our responsibility to encourage creative product development and to curb practices that compromise innovation.

While it provides clarity to the third party Twitter services, one has to wonder if many of these services would have built their applications knowing that in-stream advertisements would be banned. While the company doesn’t want these companies providing in-stream advertisements, they “imagine there will be all sorts of other third-party monetization engines that crop up in the vicinity of the timeline”. Got that?

That means you can place ads anywhere in your application as long as it’s not in the stream. If your business was just killed, Twitter thinks you have at least something to look forward to:

We will continue to move as quickly as we can to deliver the Annotations capability to the market so that developers everywhere can create innovative new business solutions on the growing Twitter platform.