Will Twitter’s Ad Strategy Work?

This week Twitter launched Promoted Tweets, an advertising platform that sheds light on its much-discussed business model. The platform takes a page out of Google’s advertising playbook by letting advertisers sponsor posts that will appear at the top of Twitter search results.

Twitter hopes to take Promoted Tweets further in the long run by dropping advertising messages into the multithreaded conversation that goes on between its users. But it may find it difficult to ensure that these advertisements are relevant and useful, and it will need to tread carefully so as not to alienate its vocal, opinionated community of users.

Cofounder Biz Stone said in a blog post that Twitter plans to display “relevant Promoted Tweets in your timelines in a way that is useful to you.” If the company can do this successfully, it will have solved one of the biggest issues for social networks–turning explosive popularity into explosive revenue.

But even the most popular social network, Facebook, has not yet become a goldmine for its backers. The hope that it would be possible to serve perfectly tailored ads based on users’ profiles and activity has faltered because of poor click-through rates. Even so, companies are still searching for the formula that will make social advertising work.

Michael Bernstein, a researcher at the Computer Science and Artificial Intelligence Lab at MIT, has been developing algorithms for automatically identifying the subject of tweets in conjunction with researchers from the Palo Alto Research Center (PARC), including senior research scientist Ed Chi. . The good news, Bernstein says, is that a lot of the interaction on Twitter happens around trending topics (the most popular subjects of conversation at a given moment). Bernstein thinks Twitter could easily insert ads into these conversation streams, much as advertisers already target the audience of a particular show on television.

However, Bernstein points out that this is not how online advertising brings in big amounts of money. A huge percentage of Google’s ad revenue comes from ads that only interest a few users a day. So to get a truly successful ad platform going, Twitter will need to identify and target much smaller groups of users who are involved in less popular topics of conversation.

This turns out to be a hard problem. The algorithms designed to extract meaning from a piece of text were intended for longer documents that usually provide plenty of cues to suggest the focus, Bernstein says. For example, a blog post about Apple’s iPad will repeat the name of the product several times. In the cramped 140 characters of a tweet, users tend to avoid repetition, making it harder for an algorithm to identify the writer’s focus. However, Bernstein says analyzing users’ previous messages, as well as those of their networks of contacts, could make the process easier.

Several companies are already trying to find ways to identify Twitter users who wield the most influence around particular brands and topics. Raj Kadam, cofounder and CEO of Viralheat, a San Jose, CA-based analytics startup that measures real-time conversations on social media sites, says that companies can reach out to these users through direct messages or other personal interactions. Promoted Tweets might serve the same purpose while requiring less expense and effort, he suggests.

But Twitter will also have to figure out how to measure the success of individual Promoted Tweets. Vishal Sankhla, Viralheat’s cofounder and CTO, says it could be difficult to figure out who’s actually seeing which Promoted Tweets, because the most engaged users access the service in a number of ways: via the Web, via text message, or through third-party applications. Twitter will have to make changes to its application programming interface in order to make Promoted Tweets work properly with third-party applications.

Depending on how Twitter decides to implement Promoted Tweets, computing power could become another challenge, says Michael Rubenstein, president of AppNexus, a real-time advertising company. Tweaking ads based on user behavior and other factors requires a great deal of computation and platform stability, he says. It is unclear how much Twitter will try to adjust the behavior of Promoted Tweets on the fly, but Stone’s post suggests that ones that don’t perform well will be removed.

Promoted Tweets won’t appear in user timelines for a while yet. By the time they start appearing, Twitter hopes to have fine-tuned its algorithms so that users don’t mind–or even like–the ads.

http://www.technologyreview.com/web/25096/page2/

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Top 10 Web Trends 2009 – 2010

We’re well into the current era of the Web or web trends, commonly referred to as Web 2.0 Features of this phase of the Web include search, social networks, online media (music, video, etc), content aggregation and syndication (RSS), mashups (APIs), and much more. Currently the Web is still mostly accessed via a PC, but we’re starting to see more Web excitement from mobile devices (e.g. iPhone) and television sets (e.g. XBox Live 360).

Bearing all that in mind, here are 10 Web trends to look out for over the next 10 years…

1. Semantic Web
The Semantic Web is about machines talking to machines. It’s about making the Web more ‘intelligent’, computers “analyzing all the data on the Web – the content, links, and transactions between people and computers.” So when will the Semantic Web arrive? The building blocks are here already: RDF, OWL, microformats are a few of them, but we are probably a few years off still before the big promise of the Semantic Web is fulfilled.

2. Artificial Intelligence
Possibly the ultimate Next Big Thing in the history of web computing, Artificial Intelligence has been the dream of computer scientists since 1950. AI means making intelligent machines. In that sense, it has some things in common with the Semantic Web vision. We’ve only begun to scratch the surface of AI on the Web. AI has a lot of promise on the Web. AI techniques are being used in “search 2.0?

3. Virtual Worlds
Second Life gets a lot of mainstream media attention as a future Web system. But at a recent Supernova panel that, the discussion touched on many other virtual world opportunities. On one hand we have the rapid rise of Second Life and other virtual worlds. On the other we are beginning to annotate our planet with digital information, via technologies like Google Earth.

4. Mobile
Mobile Web is another Next Big Thing on slow boil. It’s already big in parts of Asia and Europe, and it received a kick in the US market this year with the release of Apple’s iPhone. This is just the beginning. In next 10 years time there will be many more location-aware services available via mobile devices; such as getting personalized shopping offers as you walk through your local mall, or getting map directions while driving your car, or hooking up with your friends on a Friday night. Look for the big Internet companies like Yahoo and Google to become key mobile portals, alongside the mobile operators.

5. Attention Economy
The Attention Economy is a marketplace where consumers agree to receive services in exchange for their attention. Examples include personalized news, personalized search, alerts and recommendations to buy. The Attention Economy is about the consumer having choice – they get to choose where their attention is ’spent’. Another key ingredient in the attention game is relevancy.

6. Web Sites as Web Services
Scalability of entire web architecture is turning into both platform and database which is a big issue and legal aspects are never simple. The transformation will happen in one of two ways. Some web sites will follow the example of Amazon, del.icio.us and Flickr and will offer their information via a REST API. Others will try to keep their information proprietary, but it will be opened via mashups created using services like Dapper, Teqlo and Yahoo! Pipes. The net effect will be that unstructured information will give way to structured information

7. Online Video / Internet TV
This is a trend that has already exploded on the Web – but you still get the sense there’s a lot more to come yet. It’s fair to say that in 10 years time, Internet TV will be totally different to what it is today. Higher quality pictures, more powerful streaming, personalization, sharing, and much more – it’s all coming over the next decade. Perhaps the big question is: how will the current mainstream TV networks (NBC, CNN, etc) adapt?

8. Rich Internet Applications
As the current trend of hybrid web/desktop apps continues, expect to see RIA (rich internet apps) continue to increase in use and functionality. Adobe’s AIR platform (Adobe Integrated Runtime) is one of the leaders, along with Microsoft with its Windows Presentation Foundation. Also in the mix is Laszlo with its open source OpenLaszlo platform and there are several other startups offering RIA platforms. Let’s not forget also that Ajax is generally considered to be an RIA – it remains to be seen though how long Ajax lasts, or whether there will be a ‘2.0′.

9. International Web
As of 2008, the US is still the major market in the Web. But in 10 years time, things might be very different. China is often touted as a growth market, but other countries with big populations will also grow – India and African nations for example. For most web 2.0 apps and websites (R/W web included), the US market makes up over 50% of their users. Indeed, comScore reported in November 2006 that 3/4 of traffic to top websites is international. comScore said that 14 of the top 25 US Web properties now attract more visitors from outside the US than from within. That includes the top 5 US properties – Yahoo! Sites, Time Warner Network, Microsoft, Google Sites, and eBay.

10. Personalization
Personalization has been a strong theme in 2008 particularly with Google. Indeed Read/Write Web did a feature week on Personalizing Google. But you can see this trend play out among a lot of web 2.0 startups and companies – from last . Fm to My Strands to Yahoo homepage and more.

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