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Summary:

Almost a year after it angered users with its ‘quick bar’ advertising, and several months into its new Promoted Tweet service, Twitter’s ad platform seems as shaky as ever. Is targeted advertising a myth, or can Dick Costolo and team turn it around?

Apple Event 10/4 Dick Costolo Twitter CEO

Apple Event 10/4 Dick Costolo Twitter CEOOnline advertising can be worth an awful lot. The ability to serve targeted ads is the engine of Google’s financial juggernaut, and still responsible for almost all of its revenue. It’s also what is driving Facebook’s rumored IPO, which reports suggest see the company valued at $100 billion. Online ad spend in 2012 is expected to be $39.5 billion in the U.S. alone. I don’t know about you, but that sounds like a big deal.

But targeted advertising is also, by and large, terrible. Just take a look at Google’s recent attempt to be transparent by showing you its ad preference manager, which seems to think everybody who uses it is a middle-aged man working in the technology industry.

And then there’s Twitter.

Oh Twitter. Why are you, one of the great hopes of the social web, getting it so wrong?

You probably know about Promoted Tweets, the company’s attempt to make money from its ever-growing user base. Since September, the company has been slowly rolling the ads out in new ways, selling more units in more countries and pushing them forward so that the ads are deployed straight into user’s timelines.

That means that the service effectively elbows out a single message from somebody you follow with one that somebody else has paid for. But don’t worry: the company promised that “we will display Promoted Tweets in the timeline when they are relevant” and that, “we will expand the rollout only when we feel we’re delivering a high-quality user experience.”

But is it really living up to that claim?

Today it became apparent to me just how abysmal Twitter’s advertising machine remains, even as the company rolls around in more than a billion dollars of funding.

Earlier today, my partner looked at her Twitter stream and saw a promoted tweet that could not have been more poorly targeted. It was for a product from VKernel, a virtualization management service.

To say that she has never shown the slightest bit of interest in virtualization is an understatement. In fact, she yelped in dismay when she saw it, because it was painfully out of place. “I don’t understand any of this,” she grumbled.

While it could be a one-off, in fact this seems to be the case for many people. One friend reports that the first ad she saw on Twitter was from Lexus, despite the fact that she doesn’t tweet about cars and doesn’t even have a drivers’ license.

And then there are the Promoted Tweets that look a lot like spam, such as this one from Negri Electronics promising users a shot at a free Android handset if only they’ll follow its account. Crazy, right? An ad in which the advertiser has effectively paid Twitter to help it get more followers on Twitter instead of growing organically.

Now, of course, the problem of annoying ads isn’t exactly new. Television and radio advertising has been doing this for years: interrupting the content we want with financially lucrative content that we don’t. We’re used to it. And it’s still early days for Twitter: targeting could get better as more and more advertisers arrive on the service, and Twitter is undoubtedly trying to improve its hit ratio.

But this isn’t exactly a new issue for Twitter.

It’s been almost a year since the arguments over Twitter’s “quick bar” — an imposing space for advertising that it injected onto its mobile apps and filled with irrelevant information — and little seems to have changed. In a piece I wrote at the time called “Why the fuss over Twitter’s quick bar won’t go away”, I argued that being unable to provide relevant advertising was its biggest problem:

The issue, by and large, isn’t that the Trends bar is a bad idea. It’s that the trends aren’t relevant. This seems so obvious that it causes consternation among users. So that irritation… develops into a series of gripes. Why can’t Twitter do a better job of showing me information that’s worthwhile? Isn’t that the whole point of it?

It’s a fair point. I willingly give Twitter huge amounts of information about myself and the people I am interested in. I’m essentially handing over information that other publishers and platforms would pay for — and yet the best it can offer me is a link to some crap about Sammy Hagar.

Eleven months on, the delivery method appears to have changed, but the accuracy seems just as poor. Promoted Tweets might be making Twitter money, and they might get better over time as more advertisers hit the service … but right now it’s a problem.

The great hope of targeted advertising — the ultimate reason we give up all our data to these companies — is because we want to get away from the TV model. The idea of targeting is that it works better for everybody: the advertiser gets better audience, people get the service they want — and perhaps ads that are actually useful, and the service provider gets to make a little money too.

Right now, that balance is tipped in the wrong direction: Twitter’s making money, but at the expense of users and advertisers. This isn’t the future I thought we’d be getting.

  1. That’s the trouble with twitter? I thought the trouble is that it consumes so much time and energy to filter out the minutiae and narcissism from anything of value that it’s not worth the effort just to get 140 characters of opinion.

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  2. Twitter is getting it so bad because they and many other do not understand that we have moved into the “Community First” era of consumer internet apps…They will never find there way because most if not all of their thinking will revolve around business models that treat the “Community” that adds value as fodder for the grinding wheels of revenue generation….We have developed a “Community” Frist alternative to Twitter, Google and Facebook…Shortly we will be rolling out service that will generate revenue and also return value to the “Community”

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  3. I disagree with the premise that the only problem here is that the ads are badly done and badly targeted. I don’t want ads at all, and many others are in the same boat.

    Twitter doesn’t *need* to make bushels of money. They could easily have an opt-in ad service for those that don’t care, which would easily pay the costs of Twitter and development of same. I would pay money for a client if I could be assured that I did not get ads. Twitter also presumably gets money from partners like Apple.

    The whole premise that Twitter “needs to monetise” (through advertising) and that this should be an expected and good thing is never questioned by the tech press yet it is far from a logical argument. Sure, we’ve come to expect that companies will eventually sellout their principals for advertising dollars, but it doesn’t *have* to be so at all.

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    1. Bobbie Johnson Monday, January 30, 2012

      Good point, Jeremy, and thanks for making it. And I totally agree with you in principle: a service like Twitter shouldn’t need to make boatloads of cash in order to keep going. Even if needs significant revenue to support a large user base, there are more subtle ways to raise it: paid access to the firehose, paid professional or company accounts, subscription accounts with (say) better archiving facilities and so on. All of those would be viable business models for a medium-sized Twitter.

      Except the reality is that Twitter has got itself into a position where it can no longer look to those sorts of medium-sized opportunities. The reality is that Twitter now *does* need to make a lot of money. It’s taken a vast (truly vast) amount of funding, hired a lot of people, expanded its remit, made a lot of acquisitions and stepped onto a different playing field than it was standing on even a couple of years ago.

      Back then, Biz Stone told me that Twitter didn’t need to be a huge company. He’s no longer there, of course, and I think the management now has decided that it *wants* to be a huge company. That’s an important difference, and it means it can’t go backwards now. That’s not the tech press making an unquestioning argument, it’s the economics of the situation Twitter has put itself in.

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  4. To setup a Facebook account one has to put in certain personal information that’s very important and helpful to potential marketers. They know your full name, age, sex, birthday, geography.

    To setup a twitter account what do you need? Just an email account and that’s it.

    Think about what that means in light of this article.

    In other words…what do you expect?

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  5. Yes…that promotion really was in a poor taste. Promoted tweets are just wrong. Why can’t they try it out in a much more organic fashion, wouldn’t that make it look more natural?

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  6. “That means that the service effectively elbows out a single message from somebody you follow with one that somebody else has paid for.”

    I really can’t support the idea that this would annoy a Twitter user. How many tweets do people really feel like they are missing? Passively scanning, I would bet, is less about about how Twitter is used. I would bet that more people use Twitter to create and then send a message. In that case, a sponsored Tweet will do nothing to displace communication.

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