In-stream Twitter ads are here to say, or so says Jan Schulz-Hofen, CEO of Magpie, a Twitter ad network that was among many seemingly under fire from Twitter, Inc. last week after the company announced changes to its terms of service. In this newly updated agreement between Twitter and its developers, it appeared that the popular microblogging company was banning the insertion of ads into users' Twitter streams. Because of the vague language used, there was a lot of initial confusion about what types of third-party services would be affected by these changes. At first glance, it appeared Twitter was banning ad networks like Magpie, Ad.ly and 140 Proof, among others, from automating the insertion of ads into a user's timeline.

As it turns out, that may not be the case after all. (For now, that is).

Ad Networks to Users: Everything's Fine, We Promise!

Since the news first was announced, the owners of several Twitter advertising firms have posted, tweeted and sent out press releases affirming that their businesses are safe and sound. Ad.ly, for example, reported it was "business as usual" within hours of the original news. MyLikes CEO Bindu Reddy also confirmed the same. Ted Murphy from IZEA's Sponsored Tweets blogged that not only is the service still up-and-running, it won't even have to switch over to a non-automated mode of tweeting ads, as was suspected earlier.

Now Magpie is adding its voice to the growing chorus, announcing that it too, is entirely unaffected by the changes. According to a press release issued by the company just yesterday, Twitter ad networks like its are not at risk, but Twitter client applications are.

According to Magpie, the source for this information is Twitter's own director of platform, Ryan Sarver, who posted to a Twitter mailing list last week clarifying the news:

"I want to make sure this part is clear - this policy change isn't meant to say that we are going to start policing if the content of something a user tweets is an ad or not. The policy change affects 3rd party services that were putting ads in the middle of a timeline. So if Liz is paid by Reebok to tweet about how much she loves their new shoes, we are not going to be policing that any more than we were on Friday. This policy also *does not prohibit* services like Ad.ly that help facilitate those relationships or even help her post the ads to her timeline on her behalf."

Who's at Risk?

But as we reported earlier, the "nuanced" language used in the terms of service already has some investors and developers worried. With this small change, the microblogging network has potentially threatened the business models of a number of services being developed atop Twitter's platform.

Twitter ad networks may be OK, but other applications may be at risk. For example, TechCrunch reported that Twitter banner ad network Featured Users was the first victim of the change, having put itself up for auction immediately after the news broke. But its co-founder Dusty Reagan, unequivocally countered that statement, replying via comments that Featured Users is "not adversely affected by Twitter's new TOS, AT ALL." (The caps are his, not ours).

Then who is affected? That's the real question. From everything we've heard, no businesses built on top of Twitter have been shut down as of yet. (Let us know if you've heard otherwise).

Twitter's Promoted Tweets FAQ Confirms Changes, Details What Apps Affected

In the meantime, Twitter developer advocate Taylor Singletary, pointed concerned mailing list developers to a new resource at Twitter.com for advertisers. The page describes the company's upcoming Promoted Tweets service, which will deliver targeted advertising at the top of Twitter's search results pages.

Launch partners for this service include Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks and Virgin America, all of which will soon begin using a self-serve dashboard to "promote" tweets from everyday Twitter users (or their own accounts) and have those placed at the top of a search results page where they're clearly labeled as ads, much like the sponsored results on a Google Web search results page.

The secret to the ToS change and its meaning can be found within the FAQ. In response to the question "What sort of advertising is not allowed?", the answer reads:

  • Advertisements that resemble or might be confused by users as a Tweet
  • Paid Tweets injected into any timeline on a service that leverages the Twitter API (other than Promoted Tweets). This applies to any Twitter stream, whether user based, search based, or other

The first bullet point warns those tweeting ads that those ads must be properly identified as such, which isn't a new requirement. However, it's that second bullet point that's the most telling regarding what services will be affected - that is, any service that leverages the Twitter API to serve ads must use Promoted Tweets going forward (Update: Twitter has clarified this - "If a service is going to place paid tweets into a timeline, then Promoted Tweets need to be used. Other types of paid tweets are not allowed"). Twitter will split the ad revenue with the service's developer 50/50, explains the FAQ. Developers are also welcome to place ads "around or on" applications or websites that display tweets. Those revenues will not be shared with Twitter. Update: From the way it was worded, it appeared that revenue would not need to be shared with Twitter in these cases. However, Twitter says there are some cases where rev share is necessary. Specifically, "in cases where Twitter content is the primary basis of the advertising sale, we require you to compensate us (recoupable against any fees payable to Twitter for data licensing)."

The ToS again clarifies that individuals being paid to tweet will not be affected, but concludes with a dire warning to those from the ad networks proclaiming everything is OK:

"As with any practice, however, we are following this activity and will prohibit practices that have harmful effects on our ecosystem."

In other words, this may change again.

Twitter would not comment on the Terms of Service changes nor its implications.