Twitter is to place advertisements in the timelines of users who follow a particular brand, but an industry expert says small businesses should be wary of using the network as an advertising platform.
The micro-blogging site has announced it will begin testing its new advertising offering, known as Promoted Tweets, with large companies including Dell, Groupon, LivingSocial, Microsoft, Starbucks and Red Bull.
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Twitter has enjoyed explosive growth since it was founded in 2006, but it is unclear how successful it has been in translating its popularity into profit.
Speaking at a tech conference last week, Twitter chief executive Dick Costolo declined to reveal whether the company is profitable.
However, he said the number of advertisers on the platform is up 600% this year over last year, when it numbered in the hundreds.
Twitter said the new advertising scheme will involve placing Promoted Tweets from accounts that a user follows “at or near the top” of their timeline, or stream of messages, when a user logs in.
“These Promoted tweets will scroll through the timeline like any other tweet, and like regular tweets, they will appear in your timeline just once,” Twitter said.
“Promoted Tweets can also be easily dismissed from your timeline with a single click.”
The advertiser-sponsored tweets will only be shown on the accounts of users of the Twitter.com website, not the scores of third-party applications used to access the service such as TweetDeck.
Sam Yip, senior research manager at Telsyte, says it’s a natural progression for any website with critical mass to want to monetise its viewership.
“However, a lot of group buying sites, for example, are using Facebook a lot more than Twitter because Twitter is seen as a broadcast channel, while Facebook is more interactive,” he says.
According to Yip, paid advertising on Twitter is a “mixed message” because most Twitter users follow a particular channel or account.
“It could dilute the value proposition of following a particular account on Twitter, especially when it comes to brands. It’s really something that could affect companies that use Twitter accounts to communicate with their customers,” he says.
“The difference between Twitter and Google is that Google produces multiple results. On Twitter, you’re on a particular channel – you’ve already got the result you want so there’s no need for alternative marketing.”
“For example, if you enter ‘baby clothes’ into Google, it’s okay to have ads come up. But if you’re following ‘Bonds baby’ on Twitter, other [content] around can dilute that.”