Twitter Outsources Ad Model Development

Twitter’s phenomenal growth can be traced in large part to a decision the company made early on to let outside developers determine uses for the service. That’s led to hundreds of applications that manipulate Twitter data in ways the company couldn’t imagine.
It is taking a similar approach to the development of its business model. This week, two companies are working on ways to embed advertising with the Twitter experience, experiments that could pave the way to how Twitter will do the same.
Social Media, a San Francisco startup specializing in pioneering ad formats in social spaces, is introducing an ad product called Twitter Sparq that will embed advertising in Twitter streams by asking users of Twitter clients to answer a question in a message. Those answers will then be broadcast to the respondent’s network, hopefully spurring conversation about the advertiser, said Seth Goldstein, CEO of Social Media, who calls the service “AdWords for Twitter” after Google’s wildly successful self-service ad platform.
“You’re basically buying the opportunity to have people tweet about your product or service,” he said. Social Media will track tweets, retweets and clicks to URLs provided by advertisers.
Meanwhile, Federated Media Publishing has rolled out its third sponsored Twitter aggregation site, The site, sponsored by Universal Pictures, aggregates Twitter messages on film topics. It is promoting Universal’s Bruno release by skinning the page with the Sacha Baron Cohen character and featuring his Tweets from @brunovassup. Universal will use the site to promote another movie, Funny People, due for release at the end of the month.

FMP plans to roll out two more brand-sponsored sites aggregating tweets in the next month. The model has proven to work, said Mallary Weintraub, manager of strategic programs at FMP, with solid interest in previous projects ExecTweets and TitleTweets, which tracked conversations around the NCCA Men’s Basketball Tournament. ExecTweets, which organizes messages from top business leaders and is sponsored by Microsoft, has nearly 400,000 followers on Twitter.

“There’s so much content out there,” she said. “To have a place where it’s neatly packaged seems to be viable and there’s a lot of interest.”
The efforts of both companies could provide Twitter with clues to how it can integrate brands with the service. Its founders and backers have said the company isn’t interested in traditional banner placements on the service. It has plans to begin charging brands using the service for extra features.
Social Media hopes its new platform provides another avenue for brands to enter the stream of conversations happening on Twitter. It has copied Google’s model in allowing advertisers to bid on keywords and charging on a performance basis, although rather than clicks it charges based on Tweets. It has distribution deals with two Twitter clients, which are used in place of to read and respond to messages, Twitterfon and PowerTwitter.
While companies like Izea compensate users for tweeting about products and services, Social Media will not, Goldstein said.
“I think the minute you compensate people from tweeting you throw all the credibility out the window,” he said.
While Twitter could learn what advertising model works with both efforts, it will only see revenue through FM, which has a revenue-sharing agreement. Twitter will also promote CinemaTweets and other brand-sponsored aggregation sites via its “sponsored definition” ad unit on

Nielsen Business Media