Home Ads Aren’t Reshaping Twitter, Twitter Is Reshaping Ads

Ads Aren’t Reshaping Twitter, Twitter Is Reshaping Ads

Lost in the recent noise about Twitter’s developer relations and product designs is that Twitter is quickly (and relatively quietly) becoming a successful advertising business. And it’s doing this in its own way: Not by running banner ads or video pre-rolls, but through its own interactive, networked ad products.

Twitter Ads March Ahead

Most Twitter users don’t – and shouldn’t – visit Twitter’s Advertising blog. But it’s actually pretty interesting. The cadence and variety of announcements, including new targeting features and measurement tools, suggest Twitter’s advertising team is “shipping” regularly across many disciplines.

And something’s working: Twitter’s ad boss Adam Bain recently took the top spot on Adweek’s list of the 50 top industry power players. “Twitter is where the new ad wars are being waged,” Adweek gushed, noting that “promoted Trend ads now command $120,000 a day – and advertisers have to wait in line.” (Adweek cited Bloomberg’s earlier report that Twitter projected $1 billion in revenue in 2014, but nothing more recent.)

Bigger picture, Twitter is building an advertising product that’s vastly different than what other media companies offer.

Twitter ads are designed to be human – content, in a brand’s “voice,” but not robotic – and meld with the content around them. They’re designed to provoke feedback – via favorites, retweets, hashtagged tweets, and replies – in the same medium they’re created and presented in. They’re simple, so they can be created on-the-fly as events unfold. And advertisers can increasingly target them to people who might actually be interested in their pitch.

“The canvas is the conversation itself,” Twitter CEO Dick Costolo said on the Charlie Rose show last week, contrasting Twitter’s content-based ads to previous, “megaphone”-like ad experiences. “What we’re trying to tell marketers is, you might not even go into a campaign knowing what you want to say in advance.”

That’s not to say they’re perfect – Twitter and its advertisers are just as new to this as we are, so it’s still a learning experience. Some of the ads I’ve seen seem awkward and forced, or just lame, but I’ve also actually followed a few “promoted” accounts I didn’t know about, too. Either way, even I’ve found Twitter ads less detracting and more compelling than the typical banner ads on most media sites. And that’s the idea.

“Our business is only going to work if we’re putting content in front of our users that they want to see and that they engage with. And that’s the simple equation,” Costolo told CNBC this week. “If we do that, the users will be happy, our business will work, and our advertisers win.”

But it would be a mistake to assume that ads are solely driving Twitter or its product decisions.

Users First, Business Next

I’ve written, now a few times, about Twitter’s utmost desire to remain independent, and how that will require – sooner than later – a robust advertising business. (“Big money soon, or Twitter becomes Windows Live Chat Bird or Google+ for Glasses, and we all lose.”)

But to my understanding, that’s actually not the driving force behind big-picture Twitter’s decisions. The nuanced feedback I’ve received repeatedly is: Yes, obviously, the ad business matters. But actually, what’s really important is user growth.

Twitter “only” has 140 million users. (More than that now, probably, but that’s the last “official” figure.) Yes, that’s more than 10 million users, but it’s not 1 billion. So, as a result, product decisions are made with the user in mind first and foremost – and especially with the future user in mind. What’s going to make Twitter better for its next 800 million users than it was for its first 200 million? How can Twitter be simpler, more engaging, and more attractive?

That won’t please everyone, especially – as we’re seeing – Twitter’s geeky early adopters. But it’s crucial to Twitter’s future – especially as an independent company. And it makes much more sense than the idea of tweaking the UI just to grease existing advertisers.

The result, if everything works, could be a Twitter with many hundreds of millions of users, and a billion-dollar-plus ad business. Not bad for a company whose business model was a punchline for so long.

Twitter CEO Dick Costolo photo (cc) Kevin Moloney/Fortune Brainstorm Tech via Flickr.

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