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Summary:

The Associated Press is running sponsored tweets as part of a deal with Samsung during the Consumer Electronics Show. While this is allowed under Twitter’s rules, it also clearly threatens the network’s future as an advertising medium. How long will it allow this to continue?

We’ve written a lot about Twitter’s attempts to put a lid on its real-time information network and control as much of the content that flows through it as possible — especially the advertising, which is the key to the company’s ability to monetize that network. Unfortunately for Twitter, there are still plenty of holes in that lid, including the one that The Associated Press newswire is currently using to distribute its own “sponsored tweets” as part of an advertising campaign with Samsung during the Consumer Electronics Show. It’s just like Twitter’s promoted tweets, except the network doesn’t see a dime. How much longer can it allow this kind of practice to continue?

The Associated Press announced the campaign on Monday during the launch of the giant CES conference, saying it would be posting the sponsored tweets twice a day for the duration of the show, and that the content for the messages would be “provided by Samsung and handled by staff outside the AP newsroom.” The latter comment seemed to be designed to address criticisms that using its Twitter feed in this way might run afoul of journalistic conflict-of-interest guidelines, but AP said it had developed internal guidelines that would allow it to do so “without compromising its newsroom values.”

Judging by some of the responses to the AP’s first sponsored tweet on Monday, some readers and followers aren’t too crazy about the idea of the newswire mixing news and advertising in its stream. But the one who is likely the most upset by this move is Twitter, since promoted tweets — and other related offerings such as promoted trends — are seen by many as a crucial part of the company’s drive towards monetization and justifying its estimated $10-billion market value.

Twitter CEO Dick Costolo and the network’s head of advertising, Adam Bain, have both talked about how successful the company’s advertising strategy is, and the engagement metrics that companies and brands see when they use the network’s sponsored tweets. But the Associated Press campaign highlights one of the biggest risks for Twitter in this approach: namely, that media entities who also have relationships with advertisers will side-step the company’s program and try to take over the middleman role themselves.

Doing an end-run around Twitter’s ad program

Twitter good and evil

Twitter has cracked down on outside ads in a number of ways, including outlawing third-party networks that insert ads into a user’s stream automatically, since that competes directly with the company’s own “do it yourself” ad program, which it launched recently. However, its policies still allow accounts like Associated Press to run their own sponsored tweets — provided those tweets aren’t posted automatically through the Twitter API:

“In cases where these Tweets are paid or otherwise sponsored, any payment arrangements are the responsibility of the user and the sponsoring brand or service. These “sponsored” Tweets are not prohibited, provided they clearly disclose the nature of the sponsorship on Twitter, and do not otherwise violate the Twitter Rules.”

As the WSJ pointed out in a piece on Twitter’s ad strategy last year, one of the big benefits for brands is that the social network allows them to connect directly with their fans. Unfortunately for Twitter, that ability also makes it less likely that some will bother paying the network for the right to do so. And moves like the one The Associated Press has made add another layer of difficulty — if AP and others are charging less, then why would a brand use Twitter’s advertising program at all?

Of course, Twitter’s ad strategy offers a number of features that a campaign with someone like AP doesn’t: for example, it can be used to target specific users with specific interests across the entire network, whereas Samsung is just getting whoever follows the AP’s feed. And Twitter has an interesting twist on the pay-for-engagement idea — the less interaction promoted tweets get, the less an advertiser has to pay. Presumably, the network can also offer analytics around who interacted with a tweet and how, something a user like the AP wouldn’t be able to offer.

That said, however, every advertiser that chooses to go the same route as Samsung makes it harder for Twitter to justify using its own in-house program. In the future, it will likely have to either up the ante with more features, or crack down even harder on those who offer advertisers an end-run around its program — or ask for a share of the revenue.

Post and thumbnail images courtesy of Shutterstock/Gl0ck and Flickr user SocialSidekick

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  1. Matt – you really miss the point. What % of the APs Twitter followers saw the ad? 5%? 10%? If the AP wants to reach 75%, they will need to pay Twitter. Think of it like a mailing list(not email, snail mail), the list is APs, to reach it they have to pay the post office (I.e.Twitter).

    Lou Kernet

    1. I think that’s definitely going to be Twitter’s argument when it makes the case to advertisers. Thanks for the comment.

  2. francinehardaway Monday, January 7, 2013

    Am I the only one who finds this shocking? For many reasons?

    1. probably yes. Advertising is everywhere, so anyone that can take avantage of it, will.

  3. I’ve seen this advertising format since 2010. I think it’s getting passe

  4. Mathew Ingram Tuesday, January 8, 2013

    I think that’s definitely going to be Twitter’s argument when it makes the case to advertisers. Thanks for the comment.

  5. Let’s set aside the “news publication tweeting advertising” instead of content issue. That is a discussion in itself but the thrust of the article here is more about the monetization side.

    I think the more advertisers see Twitter usage and/or placement as a viable advertising channel, the better for Twitter. As the article rightly points out, the level of analytics and reach that the advertiser gets amongst those that are followers of the publication/brand are going to be RADICALLY different, and that increased value should justify higher prices for advertisers. Remember, twitter (and probably Facebook too though this is changing rapidly e.g. http://huff.to/VQtQm5) is still a very experimental/unproven advertising channel, and this stuff probably helps them more than hurts them.

    No matter what big networks like Twitter or Facebook do to create viable “native” advertising opportunities, people using their platforms will come up with ways to end-run around them. Whether that’s schlocky and hurts the user experience like creating fake Facebook accounts that show up in search results, or not (like this arguably). These networks themselves mostly provide mechanisms for self-policing, whether that’s ad feedback or “report fake accounts” or so on, or in the case of tweeting, just @reply you think the “ad” sucks for a start.

    Twitter’s initial focus should be on feedback and the overall user experience, not sharing in the monetization yet. Once their platform is more established as an ad channel as it NO DOUBT will be soon, then they should start thinking about formalizing further.

  6. Dorian Benkoil Monday, January 14, 2013

    I have sold ads into a media property’s Twitter stream, and have wondered when the day could come when Twitter taps us on the shoulder. My hope is that they’re smart enough to make it a win-win, so that we can continue to place the ads, and Twitter takes a small proportion, rather than shutting it down and forcing the client to go to them. That would not only hurt us , but also (continued on MediaFlect.com).

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