Twitter is now selling its Promoted Tweets for $100,000, according to an article in this morning’s Wall St. Journal. Promoted Tweets, which allow companies to buy the top spot on Twitter’s search results page, is just one of the microblogging network’s new advertising initiatives as of late. The idea behind these digital ads is that the service allows companies to associate themselves with a certain trend or keyword. For example, launch partner Starbucks bought their brand name so that anyone searching Twitter for “starbucks” would see an advertisement for the coffee company at the top of the results page.

But while $100,000 is a lot of money to most, Twitter’s Promoted Tweets and its other initiative, Promoted Trends, are experimental, largely unproven and not worth the investment – at least that’s what several advertisers and marketers cited by the WSJ claimed. Their feelings on that matter, however, may soon change thanks to plans Twitter has in store for its ads service.

Twitter Ads Still Experimental

The Wall St. Journal article largely focused on the state of Twitter’s advertising to date. It noted that some of the early ad customers, major brands like Pepsi and Best Buy, both of which got to test drive the ad service for free, haven’t made new ad buys on Twitter.

Meanwhile, some marketers report that Twitter doesn’t offer good enough targeting and analytics to make the ads worth the money, especially when they can just as easily create a free account on Twitter and interact with the Twitter community directly, the article explains.

However, Twitter countered these claims by talking statistics: 80% of the companies that tried Promoted Tweets did make a second buy. And, as Twitter Chief Operating Officer Dick Costolo, told AdAge recently, the click-through rates on tweets are 5%, a number that’s much higher than the 1% a standard display ad on the Web sees today.

AdAge also highlighted the experience Coca-Cola had with Twitter ads, noting that the company has seen even higher interaction rates with the ads than Costolo is now reporting. However, the beverage giant’s Twitter account only grew from 50,000 to 122,000 followers – certainly not the sort of growth worth writing home about.

That particular case study demonstrates one of the issues companies have with Twitter – people are very selective about who they follow. That means if a brand wants to get in front of Twitter users’ eyeballs, they need other ways to do so beyond getting a user to follow them back. Inserting ads, promotions and other messages into Twitter’s most popular features, like its Trends list and Search results page, just make sense for companies wanting to reach this active community.

Ads to Roll Out Beyond Twitter.com

And soon, these ads will make even more sense: Twitter plans to spread its advertising beyond Twitter.com. Starting in November, Twitter ads will arrive in the numerous third-party applications that make up the Twitter ecosystem. AdAge reports too, that Twitter is experimenting with other advertising initiatives, including a Promoted Accounts feature that would accompany Twitter’s Suggested Users, a recommendations feature that serves as the way new Twitter users find interesting accounts to follow.

Twitter won’t reveal the number of searches it sees on Twitter.com, but touts its other numbers instead: 160 million accounts and 100 million tweets and 370,000 new users per day. Those stats led AdAge to believe (and us as well) that the number of searches on Twitter is quite high indeed. Twitter ads may still be “experimental” and marketer reaction may be mixed, we think that the ads will ultimately prove a successful revenue stream for the company, but not its only one.

sarah perez

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