Inside Word
Inside Word: In Defense Of Ads In Twitter
The Inside Word is a weekly feature that looks at compelling industry debates and discussions unfolding on the blogs of employees at digital-media companies.
Blogger: Mark Suster
Position: Partner, GRP Partners
Blog name: Both Sides Of The Table, which features startup advice
Backstory: No one knows what percentage of Tweeters (if any) would drop the service if ads started showing up in their streams, but Suster’s firm invested $500,000 last month in Ad.ly, an in-stream Twitter ad company. Ad.ly pays users, mostly celebrities, who agree to send one Tweet from an advertiser every other day for seven days to their followers.
Blog post: Suster defends the investment in a recent post, arguing that users will accept in-stream ads. “We’ve run enough campaigns to know that users have been tolerant of authentic ads,” he says. “I remember in the mid-90’s when banner advertising started. The first ads I remember were on HotWired. Users were outraged. ‘The Internet is free, you can’t make money off it! It’s for all of us. It’s not TV.’ Do you notice anybody complaining about banner ads these days other than from advertisers complaining that they’re not effective?”
He goes on to say that Ad.ly’s in-stream ads have had high click-through rates because it’s an intent-based form of advertising. “I have chosen who to follow on Twitter so the information in my stream is self selected.”
Post-script: I asked Suster what the market would look like in a year. He said there would soon be a “proliferation” of Twitter ad platforms. As for Twitter itself, Suster said he didn’t believe that advertising would be the company’s focus for the next year-and-a-half—something Twitter executives themselves have said. “If they do enter the market I would imagine it would be through an acquisition of somebody who has proven execution in the market. This is consistent with how Google (NSDQ: GOOG) and Yahoo (NSDQ: YHOO) entered the market for PPC (pay-per-click) advertising, with the purchase of Applied Semantics and Overture respectively.”
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Posted In: Advertising, Features, Inside Word, Social Media, Nanopublishing, Companies, Twitter
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