You can now buy ads on Twitter! What? Twitter has ads? Yes. Can’t anybody buy an ad anyway? Well, no. Twitter launched advertisements on their site in 2010, four years after they began in 2006, and they chose to do it by way of “invite only.” That meant that only businesses invited to advertise on Twitter could do so, and everybody else was left to wonder how exactly those random tweets from companies they didn’t follow were sprinkled about their feed in between the latest live-tweet from Horse ebooks and updates on life from Beyoncé. Small businesses were not able to get in on this lucrative advertising medium, tweeting about products in 140 characters or less, but now they can!
The way advertising on Twitter works is essentially like an auction for promotions. Companies can promote tweets or their actual account, and they pay a certain amount of money for “interactions.” For example, say I’m a gnome vendor. Unfortunately, my gnome company is a struggling start-up, and I want to promote myself via Twitter. I have two options: I can pay for promoted tweets, so in between all the tweets from accounts you already subscribe to, you will find my little tweet from @santabarbaragnomes saying, “Need a gnome? I sell some. Buy one today.” You can be amazed at how easy it is to adopt a gnome, and then you will like my tweet or retweet it or respond to it. That counts as an interaction.
The other way that I can do it is by promoting my account, so if you see a suggestion for accounts to follow, “Santa Barbara Gnomes” will be there; you will see it, click on it, and there you will find an account devoted to gnomes. Because it is so fascinating and you like gnomes, you will follow my gnome company. That is the account promotion interaction.
Twitter’s advertisements work as an auction in that you can choose how much you pay per promotion, whether it be a promoted tweet or a promoted account, and the increased visibility will come down to how much you pay per tweet (though Twitter says that the quality of tweets is very important too). For example, I’m willing to pay $1.50 (the Twitter recommended minimum) per promoted tweet, and my rival gnome company, Gnomalicious Garden Decorations, is willing to pay $2.00 to promote their tweets about gnome sales. Twitter will promote Gnomalicious Garden Decorations more often than my Santa Barbara Gnome tweets, because the interactions for Gnomalicious Garden Decorations will produce more revenue for Twitter.
However, say that the daily maximum interactions I am seeking is 50, and Gnomalicious Garden Decorations is only looking for 30 interactions a day. Then I am willing to pay $75 for my promoted tweets, and Gnomalicious Garden Decorations is only willing to pay $60. At that point, I would win the “auction” that is advertising on Twitter, and would be promoted more heavily on Twitter until I reach my desired number of interactions for the day.
So what does this mean for small businesses? Well, it’s a great tool to get products out there on the Twittersphere, and as a small burst of “Here I am, look, I exist” exposure for all those Twitter users out there. However, due to the auction nature of the advertising process where you are competing to out-bid the other companies in the same line of work as your company, it can get pricy. There is not a lot of cutthroat competition in the gnome industry (I think), so when it comes to fashion, or restaurants, things that are competitive and generally in demand, it is important to be willing to pay a lot per tweet or account interaction to get the company name into the minds of Twitter users.
The nice thing about Twitter advertising is that it can be geographically isolated, like all Twitter users in the Santa Barbara/Ventura area will be able to see my gnome tweets, and there can be a cap placed on the number of interactions you seek for the day. Once those interactions are completed, Twitter will cease to keep promoting the tweets, so then you will not be required to pay more. A solution could be that I am willing to pay $50 a tweet, but I’m only looking for 10 interactions. Such solutions could be beneficial to small businesses, where every interaction is important and it is not necessary that a tweet be circulated 100,000 times.
Small business advertising is about to be revolutionized, and promoted tweets and accounts are about to get a lot more interesting for Twitter users. #keepcalmandtweeton.