Twitter's EarlyBird account is definitely a step in the right direction in terms of ad and revenue strategy, but will it work?
I'm glad Twitter is getting serious about making money. Maybe it's been serious all along, but the Promoted Tweets concept—something that may or may not still be alive—is a bit of a half-baked attempt to encourage partners and advertisers to toss their lot in with Twitter. EarlyBird is a better idea, by far.
For those of you who don't remember the April announcement about Promoted Tweets, basically, they're ad-based tweets that Twitter promised to promote more prominently on the top of relevant Twitter results pages—rather like Google's sponsored search results. The big, and I thought crazy, caveat was that Twitter would pull "Promoted Tweets" that weren't performing. This was something new in advertising. If consumers didn't like the ad, then it would be pulled it down. Maybe it was the language Twitter used and not the concept. I can understand that no one wants underperforming advertising out in the wild, least of all the advertisers. Here, however, is what Twitter originally said, "We'll attempt to measure whether the Tweets resonate with users and stop showing Promoted Tweets that don't resonate." It would have made more sense for Twitter to simply say, "If too few people retweet the Promoted Tweet, we'll apologize profusely to the advertiser and pull the useless Tweet."
In any case, Twitter has now cooked up a much more straightforward way to make money. It's, in essence, launching its own nascent ad network. There's just one special Twitter account right now. It's called @earlybird. This Twitter account will host special, ultra-timely deals and offers from partners who pay Twitter to be in the stream. At this early stage, @earlybird has just 13,000 or so followers, so the CPMs (cost per thousand views rate) couldn't be very high. Still, if the Twitter accounts of founders Evan Williams, Biz Stone, and Jack Dorsey are any indication, that number could hit one million or more in no time.
Unlike a traditional ad network, this one starts with a viral network at its very core. An @earlybird tweet seen by one million followers could be retweeted by just one percent and be seen by an additional 10,000 Twitter users. That's assuming a 1X pass along. Surely, some really good deals will be retweeted 20, 30, or many more times. In other words, @earlybird is, potentially, a very powerful idea.
Now, as Twitter recognized with its first ad-based tweets attempt, this program will only be as successful as the quality of the tweets, and by that I mean the advertising and deals. I assume Twitter has a team working with partners to create incredibly engaging, pithy, powerful, and ultra-attractive 140-character ads—at least I hope it does.
If Twitter's successful, the next phase is obvious: More ad network accounts. Some will be broad like this one. There'll likely be a "supersaver" account that offers really cheap deals. Then Twitter will move to more narrow categories, such as @automotivedeals and @technologyoffers. With each new, successful slice, Twitter ad accounts will get narrower and narrower until Twitter can charge extremely high prices for ultra-vertical ad accounts. Of course, Twitter has to build or acquire the right Twitter account names. Few as good as @earlybird are probably still available. Perhaps Twitter will pay to acquire some of these desirable account names. As these accounts grow, Twitter will offer partners positions on one, more or even all ad networks—and pricing will go up accordingly.
It all makes sense, but there are issues. First of all, there's the community reaction. Do Twitter users actually want to see ads and deals on the service? The short answer is yes. Look at the success of the Woot Twitter account.
In addition, there's measurement. Twitter can help advertisers measure views based on followers and retweets. Shortened links will contain click trackers, but, like any other online ad, Twitter may have no idea what action, if any, someone takes after clicking the link.
The biggest issue, though, is rising above the noise. Unlike a Web page where ad links remain relatively static, most Twitter streams I view are literally flowing. Yes, if you view the @earlybird tweet on the traditional Twitter page, you'll likely see the ad tweet, but power users and the ones most likely to take the time to retweet are usually running third-party tools like TweetDeck and Hootsuite that keep the tweets flowing. You have to scroll back in time to see what you missed; I don't do that often enough.
I think these issues are surmountable, but I also believe that Twitter may want to start working with third-party clients to encourage a new Twitter panel for contextual, ad- and partner-driven tweets. This would be better than what I assume is Twitter's actual plan—the one where they kill all third-party Twitter tools and force people to view everything on Twitter.com—cuz that ain't gonna happen.