Good news for those small businesses eager to try and find another way of being a part of the the social media collective. Last Friday, Twitter announced that they’re rolling out a new advertising solution that will help make it easier for businesses to set up an account on their own and amplify their messages on the social network. This is a great move that will benefit emerging and new businesses who often times get swamped out of the market by the bigger and more noticeable brands. To help promote this release, American Express was brought on board as a partner designed to give all of their Cardmembers and merchants in the United States early access to this new advertising platform. While it won’t launch until late March, the partnership with American Express is probably a good move, especially when trying to reach small businesses.
To encourage small businesses to participate, American Express is giving to the first 10,000 Cardmembers and merchants $100 worth of free advertising on Twitter and in March, the credit card giant will notify its customers how to begin. For many, it might seem like Twitter’s move to have a self-serve ad platform is something akin to Google AdSense or AdWords since the advertiser will be bidding on keywords. Right now, customers are able to place their bids on promoted tweets and promoted accounts — something meant to help cut through the noise and increase exposure for whatever the advertiser wants to tweet about. According to AdAge, Twitter had already begun rolling out the self-serve ad platform in mid-November with about 20 or less advertisers, but it has since expanded to about 100 advertisers. In addition to this expansion, advertisers will pay for the bids via electronic payment, not through invoicing by the sales team–an interesting decision that makes it akin to Googl AdWords since Google processes via electronic payment while Yahoo advertising used to do it through sales teams.
As is the case for any of Twitter’s 3,000 advertisers, small businesses can set bids for promoted accounts on a cost-per-follower basis and for promoted tweets on a cost-per-engagement basis/ In the latter case they pay only when users actively engage with the tweet (by retweeting, for instance.) While national brands might be bidding on keywords or hashtags associated with major events like the Oscars, which makes bidding competitive and expensive, small businesses would be more likely to bid on highly specific terms and to localize their bids, according to Mr. Costolo. (Twitter currently allows for city-level targeting at its most specific.)
Could this move by Twitter be a boon not only to the small business but also to Twitter’s bottom line? We’ve all been wondering what the public monetization strategy will be for the company–sure, they have a deal with several companies to allow them access to the firehose and also has/had a deal with search engines like Google and/or Bing. Now, it just seems right to really take the advertising opportunities on the service out for a ride and see how it handles. But if recent studies are any indication, Twitter is set to make a hefty profit off of this endeavor–according to an eMarketer report, ad revenues are projected to grow 210% in 2011…and as you can see from the chart on the right, Twitter’s advertising worldwide is going to increase year after year all the way to nearly $400 million by 2013. There’s definitely a lot of demand for people to want to get their message across on the service. According to eMarketer’s principal analyst Debra Aho Williamson, “since their debut in April 2010, Twitter’s Promoted Products have proven successful in the US. Marketers have seen solid engagement rates with Twitter advertising—in some cases better than those on Facebook—despite Twitter’s relatively smaller audience.”
American Express’ involvement in this promotion is definitely not a coincidence. For the past few years, if not longer, the credit card company has been a strong supporter of the small business community. They were the first ones to start the Small Business Saturday campaign during the Thanksgiving holiday and have recently launched a social media show that is designed to help small businesses “harness the power of social media”. They’ve even partnered with Foursquare by offering specials to specific check-ins–most likely small businesses. Recognized for being the credit card of choice by small businesses, it’s not a tremendous leap to believe that American Express would partner with Twitter on this initiative. Definitely a win for both parties.
It will be interesting to see how Twitter’s advertising platform will still play out. At this point, there’s not a lot of advertisers that are participating in this endeavor, but soon more advertisers will be on the service and how will that add to the noise that everyone already has? With increased growth and use, comes the question about scale. But I’m sure that there are contingency plans in place to ensure sanity for all.
Photo Credit: Moma Propaganda via Laughing Squid