More thoughts on in-Tweet advertising

I believe that people who produce content should be able to make a living for producing that content. If we want journalists, bloggers, photographers, and videographers to bring us interesting stuff that makes our lives richer, we gotta figure out a way to get them paid. That’s why I care deeply about the topic of advertising and why I follow it so closely.

I joined ad.ly tonight. Partly because a friend of mine told me I should check out how much other Twitterers were getting paid. And lots of them are getting paid a ton. I’ve heard of some celebrities getting paid $30,000 for week’s worth of tweets. One guy, with 50,000 followers, claimed on his Twitter stream tonight that he was getting paid $3,000 a week.

I really don’t like in-Tweet advertising, but wanted to learn more because I’m seeing more and more of them. Why don’t I like them?

1. I like a strict firewall between editorial (er, words you write) and advertising (words someone else writes that they pay to put in front of your audience).
2. I don’t think the ad models out there price things properly. 10 people are not the same. Here, let’s say I have 10 people who are poor. Is that list worth the same as, say, 10 people who will buy a house in the next month? No way. Yet on Twitter and other streams we just don’t know enough about audiences to price ads properly.
3. If Twitter or Facebook becomes infested with instream ads it will piss everyone off and we’ll all leave, so any investment in building audiences in those systems will be destroyed by the greed of other people (I don’t run ads, but if I’m the only one who doesn’t then it doesn’t matter because no one will stay there. Already on Twitter I’ve seen even good friends, like Chris Pirillo, run tons of ads — I unfollowed him because I got tired of it).
4. I believe advertisers are getting ripped off, because some ad systems aren’t sharing the REAL value of a person’s audience and is using just lame metrics like number of followers to price out ads. When advertisers get ripped off, they figure it out pretty quickly and tell everyone that the system is screwed and to avoid at all costs. That sort of happened with Second Life (I worked at Microsoft and we put lots of money into an island’s design and didn’t get the return we should have).

So, first, on the other side, Mark Suster is an investor in Ad.ly, and he wrote a blog sticking up for in-tweet Twitter advertising. You should read his post. He’s probably right, but I don’t like in-tweet ads.

I also called and talked tonight with Ad.ly CEO Sean Rad and he told me a few things:

1. They only have one tweet a day, because they know that too many ad tweets will piss off followers.
2. Their payments are NOT based on just followers.

The New York Times has an article on Twitter advertising. In it I said I unfollow people who put ads in their Twitter stream. I should have been a little bit more clear. Putting ads in your stream, if you disclose them, won’t automatically get me to unfollow you, but it does cause me to look at the value I’m getting out of your stream. With Pirillo there is some value. So, I might follow him even though he does fill his stream with crappy ads and treats us pretty badly by not always disclosing what he’s getting paid for and what he just is putting in the stream because he’s excited. But with the other guy tonight all I saw were ads. So, I unfollowed and won’t be looking back. Actually I unfollowed Pirillo too. I don’t think he’s disclosed everything clearly or explained where his ads were coming from and until he does I’ll stay away. (UPDATE: Pirillo claims he discloses everything with an #ad hashtag, but I’ve seen stuff on his stream that looks like ads that weren’t disclosed, which demonstrates some of the problem here. It’s a perception issue).

I see some ad systems are selling ads based on followers. Even ad.ly puts that metric right on their home page, even though the CEO says that they have an extensive system for rating Twitterers. Rad, the CEO, says that the reason they don’t show the real ranking that they have is that it would piss off publishers (he admitted that many “mid-tier” publishers, like Leo Laporte, are actually more influential and drive higher ad rates than many celebrities, but he told me he isn’t willing to piss off the celebrities because they have better selling power with advertisers than people who have built more engaged audiences on Twitter, but don’t have the big names).

I think that this is a major problem for the new Twitter ad industry and is probably one reason Twitter itself has stayed away from selling ads.

My friends have been studying audiences on Twitter and real adoption behavior happens mostly through organically gotten followers, not by being a celebrity or being on Twitter’s Suggested User List. Think about it. Who would you rather have as a follower? Someone who really chose you and finds you interesting, or someone who has no clue what Twitter is about and added you because you’re on a list?

Compare Brooke Burke’s followers (she got almost all of her followers by being on the suggested user list), for instance, to the followers of Leo Laporte (he’s never been on the suggested user list).

What do you notice?

1. Leo’s followers actually use real pictures.
2. Leo’s followers actually write real content.
3. Leo’s followers (you have to study bit.ly link behavior to know this) actually click on links at a much higher rate than Burke’s do. IE, they trust what he has to say and are much more engaged with his content.
4. Burke’s followers only put her on 1,679 lists (and look at the crappy lists she’s on), while Leo’s followers put him on 6,398 lists and lists that are a lot less spammy and a lot more engaged. Keep in mind that Burke has 1.6 million followers while Leo has 150,000 followers. If Burke’s audience was as engaged as Leo’s is, she would be on 60,000 lists right now, not 1,679 (leaving quality of the lists aside).

So, what do advertisers care about?

1. Sales. IE, does the audience TAKE ACTION on what is being placed before them. Leo’s audience already is proven to take action at many many times the rate that Burke’s does (by looking at engagement, bit.ly link clicking, list development, etc).
2. Wastage. How much money do you have to spend to find people who take action? This is why old-school advertising is dying. What would you rather do? Spend $40,000 on a billboard by a freeway or put that $40,000 into Google ads where the advertiser ONLY pays if someone clicks on the ad. There’s a reason why Google is making billions of dollars. In Twitter there’s TONS of wastage.
3. Hitting the right audience. If you are selling women’s shoes, would you be better off hitting Burke’s audience (as crappy as it is, there are SOME real people there) or Leo’s?

But, see, if a women’s shoe company wants to advertise on Burke’s twitter account, they have to pay for all the followers Burke has, most of which aren’t really good.

If advertisers are paying a hefty fee for Burke just because she has lots of followres they are being ripped off. One thing I’ve learned is that advertisers don’t like being ripped off, so will force ad networks to use scores other than pure numbers of followers to price ads. And that’s if they stick around. Many advertisers may just leave and tell their friends at industry conferences to stay away.

Personally I hate in-tweet advertising. The real money is OUTSIDE THE TWEET. I expect that Twitter will clean up there big time with its new advertising play, coming soon (although Biz Stone, Twitter co-founder, still is saying that Twitter isn’t focusing much effort on ads. I wonder what the real story is here?).

Also this week I talked with Likaholix co-founder Bindu Reddy. She is working on a new ad network for bloggers and Twitterers that lets publishers choose the ads by using the technology of liking that they made for Likaholix, a service where you can share what products and services and experiences you “like.” Hey, like that Diet Coke? Get paid for it! :-)

But all this stuff makes me worried for the future of Twitter. I think Twitter needs to come out for or against these new ad networks and needs to build a platform that properly identifies advertising tweets via a different color. I’d love to be able to “tag” Tweets using my SuperTweet idea and write “advertisement” in the SuperTweet, which would tell everyone that that Tweet is an ad.

Anyway, ads are coming to streams like Twitter and Facebook whether we like it or not, so it’s time for those of us who do care about these systems to speak up and say what is acceptable and not. Here, again, is my “unacceptable” list:

1. Filling more than 5% of your stream with advertising Tweets (unless you are building a stream of ONLY advertising).
2. Not disclosing ON EVERY TWEET that you are paid to send.
3. Taking ads from companies you are covering editorially. So, if I want to write a Tweet (unpaid) about Intel it better not be right next to a paid Intel Tweet.

What’s your unacceptable list? Will you be doing in-Tweet advertising?

UPDATE: Nick Halstead, founder of TweetMeme, pitched the TechCrunch Real Time Crunchup with a new idea for in-tweet advertising called “Ad Tweets.” His pitch can be seen in this video from the event, about eight minutes in.

UPDATE #2: I will interview Ad.ly’s CEO on Tuesday, so if you have any questions, leave them in comments here.

About Robert Scoble

As Startup Liaison for Rackspace, the Open Cloud Computing Company, I travel the world with Rocky Barbanica looking for what's happening on the bleeding edge of technology and report that here.

98 thoughts on “More thoughts on in-Tweet advertising

  1. It needs to be stopped by those of us in the space that do understand targeted audience ROI and start showing advertisers that they should be going for quality of audience, not number of eyeballs.

  2. Yes I agree with you that we need to be care full when we publish an advertise because the quality of advertisement varies from man to man.

  3. there must be a balance in if someone wants to advertise, he must not be able to post more than 2 advertisement tweets in a day !

  4. i think twitter is not made for sending ads to the people who have trusted to follow you, people join the other people on twittre in seearch of really good news , or anything which is very interesting , or which is knowledge based! There must be a way to ban the spammers.

  5. Great additions here to the NYT article. Can't wait for Sean Rad's interview. One thing I'd like to ask him is: What is your one sentence response to why in-tweet advertising is good for both consumers and for brands?

    We at SocialMedia.com are in the business of social advertising, yet even our take is that in-tweet advertising contradicts the reasons why social advertising is so powerful in the first place.

    Our experience has show that “real messages from real people = higher ad awareness, purchase intent, and brand favorability”. Yet as soon as you start paying for tweets, the equation becomes “paid messages from real people”, and the rest just doesn't follow. I talk about these ideas more and the debate in my post at: http://blog.socialmedia.com/in-tweet-advertisem

  6. I don't think the debate should be whether to allow in-tweet advertising or not but to set standards that are acceptable to all stakeholders. There's content and interest in tweets and because of that, it will get monetized. The stakes are high, the money is huge, people love money.

    It's now up to the in-tweet advertising service providers like Ad.ly and Sponsored Tweets to take the moral high ground and make sure people are not duped. Disclosure is a great starting point but a lot more needs to be done.

    Let's wait and see if Sean Rad can convince Mr. Scoble on Tuesday.

    There's a lot of room for debate.

  7. I don't think I could claim to be a nice guy. I am, however, real and
    have no issues regarding telling people what I think.

  8. I understand that not everyone can debate facts and must rely on
    discounting opinions by stereotyping, but I'm not sure if that's the
    best path to go down. I'm in the process of remodeling, but you are
    welcome to come by to check the facts; I live in Boulder, so you would
    fly to DIA.

  9. Robert, very good post. I disagree that in-stream advertising is unacceptable. However, most of your objections are valid and can be addressed through 'agreed standards'.

    With my background in journalism, advertising and public relations, I believe social media advertising will become mainstream, and people will get used to it.

    While you aspire to limit advertising content to 5% on Twitter, just for comparison: the current ad-to-editorial ratio is anywhere from 60:40 to 40:60 in printed newspapers.

    David Ogilvy said: “Half of all advertising is a waste. The trouble is, I don't know which half.” Hopefully, internet advertising has a solution to Ogilvy's concern.

  10. With around 25% of tweets mentioning products or services – I suspect that a whole range of associated performance based advertising products will emerge – the opportunity is too large to ignore. I support appropriate disclosure and I'm sure we'll see many different implementations.

  11. I set mine to $20,000 per week. I really don't want to do them. It set my rates at $1,700 per week, though. Interesting to compare with, say, the Demo Conference, where companies pay $18,000 to talk to 1,500 people in audience.

  12. I did the same – if it pays, it's all business, right? My rule is the ads have to be something my audience will like, they have to be disclosed, and they have to be something I can get behind. Then, we'll see if people actually unfollow because of the ads – that's the only measurement that will cause people to remove the ads. If you don't like them then unfollow. I have a feeling that a few very vocal people will unfollow but the rest don't really care.

  13. I'm really curious to see that tape. I'm interested in the metrics. And also in how people really read the “river of news” that is Twitter. For instance, I follow 2000 people, although I'm trying to get it down. I know just about all of them, and yet I don't see very one of their tweets. Sometimes I don't see their tweets for a week in my busy stream, and then I go back and search to see what they've been doing.
    How does this influence your metrics?

  14. I would pay for a premium stream that had no ads in it. Maybe that's Twitter's own monetization model. And I also like content providers to be paid. But the more indirectly the better. Not like MLM friends.

  15. i don't know about you. i just have a personal preference for engaging with people i know or can get to know in real life. so don't get offended if i happen to think you're someone typing away in his mom's basement eating cheetos. i'm sure you can at least respect that.

  16. I signed up for Ad.ly and they said my account was worth something like $2900 per week.

    I charge $80 CPMs on TWiT so my Tweets should be worth four times what ad.ly is suggesting. I set my ad rate to a low low $10,000 per week. We'll see if anyone bites! (Hey- if I can make $500,000 a year with a few ads in my tweet stream I'll have to reconsider my stance.)

  17. Here is an idea or business model for the twitter ads from posters:

    1. Place the ads in a holding status or queue staging area
    2. Allow the twitt followers to vote or approve the ads before they are released
    3. If the ads do not receive enough votes or a threshold limit they are not released
    4. How do we prevent gaming the system? Glad you ask?
    5. Those with larger following will need higher vote threshold limits
    6. Those with smaller following will need lower vote threshold limits
    7. This will level the playing field for everyone placing ads on twitter
    8. Using this system no one will not feel annoyed with ads. Why?
    Because you had a democratic say in the approval of the ad
    9. If you feel the ad is off topic or out of character do not vote
    for its approval

    We create game changing solutions for you.
    http://www.kutro.com

  18. Robert,
    It's funny how fast things change : ) I saw you on Monday at the Ritz and you said you were totally against any form of Twitter advertising. I knew you would come around, I just thought it would take a bit longer! I would like to invite you to join http://www.sponsoredtweets.com as well. The more offers you receive from different platforms the better opinion you can form of the entire space.

    Not only do we have a system that allow you to choose your advertisers and write your own copy, we also have the industries only Disclosure Engine. This system guarantees disclosure but allows some flexibility for Tweeters (video here http://sponsoredtweets.com/ethics/disclosure-en…).

    I would be happy to discuss our approach to this form of advertising in further depth with you. Perhaps you can make it a two part interview.

  19. With all the smoke and mirrors that exists online and off this is one more turn off if ads are disclosed. I agree that there need to be strict firewalls between editorial and paid content. I don't mind some ads if I know they are ads. I'm curious as to how the new FTC guidelines will impact ad.ly's disclosure mechanisms.I read the guidelines and it certainly appears that celebrities certainly face greater risks for fines …

  20. I love Scobe's analysis of your audience. Smart to follow up using bit.ly to track click thrus. I appreciate and respect Leo's choice.. it shows how thoughtful action leads to a higher quality audience.

  21. I love Scobe's analysis of your audience. Smart to follow up using bit.ly to track click thrus. I appreciate and respect Leo's choice.. it shows how thoughtful action leads to a higher quality audience.

  22. Eugene,
    Ad.ly discloses each paid tweet with a “(Ad)” at the end of it. Initially it was “(Ad by Ad.ly)”, but we removed the “by Ad.ly” part because we didn't want our brand to interfere with the advertiser's message. We believe very strongly in disclosure.

  23. How does one determine whose opinion matters and whose does not? Is there some ordained power in charge of such a thing? I implore you to continue the ad hominem attacks rather than addressing the issues I raised as it only makes my argument stronger.

  24. I'm neither yearning for an opinion nor anonymous. Scoble knows this
    even if you do not. I own the related TLD and I use this handle all over
    the web. Thanks for your insight.

  25. This is the thing I respect about true leaders in the space like Leo. He lives and dies by advertising, there is no corporation giving him a weekly paycheck. However, he understands that his audience are his revenue stream, not his advertisers, and the minute he takes that relationship for granted, he is done.
    (now if we could just get the 20 minutes of advertising on his podcasts down below 10…. totally kidding).

    Erik Boles
    http://ErikBoles.com
    http://twitter.com/ErikBoles

  26. There are plenty of people yearning to have an opinion that matters that simply running around leaving anonymous drive by comments seem to be enough from them to feel like an expert on a subject matter and person you obviously have limited understanding of.

    You appear to be this type of person.

    :)

  27. How about a CPC / Amie St. hybrid model? You only get paid when people click a link, and your CPC rate goes up as more people click the link (every new tweet resets the CPC rate). That way, you only get paid when you tweet great content, which motivates you to only advertise content your audience will really find valuable. And if all you do is spam them with ads (or misleading ads to create clicks), you'll never make money because eventually everyone will unfollow you.

    So the question is, is there enough content out there produced by businesses who would pay for traffic? Absolutely, but it's going to require those businesses to learn to create content with value, not tasteless advertising content. Given the rise of small businesses into the world of blogging and social media, this is a huge opportunity.

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