Whither Twitter?

The debate over when and how Twitter will offer marketers paid placement among its 50 million daily tweets heated up last week when rumors emerged that Twitter will finally unveil its ad platform this month. For now, it’s speculation, but clues to how Twitter might integrate advertising can be found in the clutch of companies already integrating brand messages in the Twitter ecosystem.

Twitter is unique in that it’s a decentralized system. Its open application programming interface has allowed hundreds of developers to build programs that display and parse tweets. This has helped fuel its growth, and allows experiments in how brand advertising can work in the world of real-time status updates. Several startups over the past few months have introduced advertising to Twitter updates by various means, including matching up ad content to breaking news, brokering deals for celebrities and other tweeters to push products, and ad networks that plumb tweets for clues to a user’s interests.

Twitter COO Dick Costolo promised late last year that Twitter’s own advertising solution would be “fascinating” and “nontraditional.” Yet the road to advertising in real-time status updates is filled with potholes as users will likely resist them. There’s also the question of whether ads will work well in a communications environment.

“Relevance is going to be huge,” said David Berkowitz, senior director of emerging media and innovation at 360i. It’ll be about “where marketers [insert] themselves in conversations.”

Twitter’s search and trending topics are likely the first place advertising will appear because that’s where users reveal their interests and where the most popular topics are visible. Clues can be found in real-time status search engine OneRiot that for the last two months has concentrated on media companies looking for traffic from hot chatter topics. Its RiotWise ad net takes a feed of headlines from Web publishers and matches them to what’s trending on Twitter. A person looking for information about the whale killing a trainer at SeaWorld would get a link to a news story along with their Twitter search results.

Publishers and brands, particularly those that publish regularly, can use OneRiot’s self-service system, which is much like Google’s AdSense.

Hard-sell ad approaches won’t work well on Twitter, said Tobias Peggs, gm of OneRiot. “Brands … have to realize they have to come with different creative.”

Search is only part of Twitter’s strength; brands also tap its conversational power. That means getting into the stream of updates Twitter users see, whether on Twitter.com or the multitude of Twitter apps. Companies like Izea and Ad.ly are building networks that pump ads into the stream on behalf of publishers.

Izea was first out of the gates eight months ago with Sponsored Tweets, which closely resembles its controversial PayPerPost system for sponsored blog posts.

Users of all sizes can sign up to be matched with advertisers wanting to broadcast messages. Over 3,500 advertisers are using the self-service system, which lets users craft the company pitch but requires a #ad hashtag disclaimer.

A recent Sponsored Tweet from @mhandy1 read: “Cool Savings Calculator from Dish Network…Hockey fans they have Versus ;)… major plus!” Ad.ly has a similar system, only it standardizes the ad messages to give advertisers control. It’s also relying more on established publishers like Newsweek and celebrities like Kim Kardashian.

“We’re trying to be the AdSense of the stream,” said Sean Rad, CEO of Ad.ly. Ad.ly claims 30,000 publishers have signed up, with Microsoft and NBC running campaigns generating click rates of between 1 and 3.5 percent, he said. Publishers get right of refusal for each placement, which typically doesn’t happen in Web ad nets. “The model is new,” Rad said. “We wanted to a take a sensitive approach.”