In an interview conducted by Abby Klassen, Editor at Advertising Age, Twitter’s COO D ick Costolo took the audience through the company’s strategy for monetization.

Costolo said they were not in it to compete with Facebook, but rather to pull money away from traditional advertising.  He talked about the user behavior on Twitter being one of the reasons he did not feel it was a competition; with Twitter, people are following vs. friending.  In recent tests, they have found a significant lift in buzz for a recent movie launch using the promoted trends product. 

Costolo also mentioned that he believes the ad products they are creating might compare to Google more than Facebook due to the behavior of users on Twitter; the majority are either searching for information or following a specific topic.  Because users are searching and following, they can create ad products which help raise visibility of messaging on the page contextually to the content being searched or followed, hence, the launch of Promoted Tweets and Promoted Trends.  

Costolo also alluded to new ad products coming to Twitter, but added that they will not jeopardize the user experience to get there.  He emphasized this a few times stating they were not focused on driving short term revenue, but rather making sure they had the right product for them in the long run.  Soon, a new product for promoted accounts will be available. 

Similar to promoted tweets and promoted trends, promoted accounts will allow advertisers to raise messages from advertisers in a relevant and contextual way.  He spoke about their ability to pull data from their infrastructure about re-tweet, clicks and more and automatically optimizing the promoted products.  If they don’t raise buzz, they pull them.

When talking about future ad products, Costolo said that in 2011, Twitter would have a new self-serve platform that would open the door to all businesses; small or large, citing opportunities for both national and local advertisers. 

To answer a question about limits and their future with advertisers, Costolo said, “There are no limits”.  He can easily envision a day where advertisers are spending as much with Twitter as they do with Google. 

Scot Pettit

Microsoft Advertising, Social Media Solutions

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