Paid Media… Meet Social Media: The New Twitter Model

For three years, many of us skeptics have wondered aloud about the viability of Twitter. Will they sell sponsorships? Can they corporate tools help merit their billion dollar plus valuation? Would power users be wiling to pay for their services? Apparently, the answer is no (or at least not at the core). Instead, Twitter is taking a page out of the paid media book of tricks — but with a social twist.

Witness, the promoted trend. Some of you who still make your way over to Twitter.com may have noticed that at the top of the trending topics list, their is now a little yellow “promoted” box. According to a trusted source, this slot is purchased for 24 hours and as of right now, is selling for somewhere in the $100,000/slot range. While little data has emerged about the success of these promoted trends (or the accompanying promoted tweets), up to 80% of the advertisers who have tested promoted trends and tweets are repeat buyers.

Twitter also has a third product called recommended accounts which they plan to dial up over the coming months (beta tests with select brands ran in September). These accounts can include people, companies and services. What I like about this last model is that it fulfills on the promise of marrying social media (an annuity) with paid media (ongoing costs). It will also put pressure on companies to get strategic about their bio, picture and quality of their tweet streams.

Coming Soon

While I’m still not 100% sold on the value of the sponsored tweet (apparently they are sold on a cost-per-click basis), I do like the idea of the trends and follower recommendations, especially as things like geo, demographic and day-part targeting come into effect (I’m assuming that Twitter has plans for those in the works). All of a sudden, brands will have an opportunity an amazing opportunity to present relevant content via links based on location, profile, current trends and past behavior. And most important of all, this gets done in a place that’s become a regular hang out spot for millions of regulars.

Where things could get really interesting is when tools like Tweetdeck and Hootsuite are fitted for these same types of paid media opportunities. I’m just guessing here but I have a hunch that Tweetdeck’s launch of their latest version that includes real time updates is signaling a tighter integration between Tweetdeck and Twitter (otherwise, I can’t imagine that Twitter would allow Tweetdeck full access to its API). It’s this kind of integration that will prevent Twitter from being disintermediated from itself by the ecosystem of tools and clients that have cropped up over the last three years.

Which brands will be most successful using Twitter’s new paid offerings? I guarantee that any kind of travel and entertainment business will benefit from this. Retailers — particularly around the holidays — should also benefit from the opportunity. B2B will definitely have a tougher time cracking this nut but then again, many B2B companies are more niche advertisers anyway.

What do you think? Will Twitter truly realize it’s billion dollar plus potential this way? I have a feeling that they may just be onto something.