Why Twitter is not a huge fan of banners

By Brian Morrissey


For all the talk of making display ads bigger and flashier, Twitter plans to go in the opposite direction. The short-message service doesn’t see standard display ads, or any rich media not initiated by users, in its future, COO Dick Costolo said in an interview with Adweek.
  “They can only get so big and take up so much of the page,” Costolo said of recent efforts to give brands more space on Web pages. Too often, startups rush to adopt existing ad models, he said, a point made earlier in the day by venture capitalist and Twitter backer Fred Wilson. “They maximize short-term revenue at the expense of long-term health of the platform,” Costolo said.
  Instead, Twitter is focused on taking cues for its ad products on how people are using the system.

  For instance, it added Promoted Trends to its existing trends and will soon roll out Promoted Accounts to complement its existing account recommendations. Promoted Trends increase conversation around a topic by 300-500 percent, according to Twitter. For its Promoted Tweets product, Twitter reports engagement rates—defined as a click on a link, reply or retweet—of 5 percent on average for campaigns.

  “Even if you attribute 50 percent of that to novelty, the rate is really high,” Costolo said. To date, about 40 brands have run ad campaigns, with an 80 percent renewal rate, according to Costolo. Twitter is building out a sales force under the leadership of former Fox Interactive executive Adam Bain. It now has 16 people in ad sales.