Twitter's New Ad Product Could Create Hub Of Aggregated Advertising Data

When it comes to online ad products, relevancy is key. But one growing tech giant, Twitter, has yet to show the world the extent of its power to deliver relevant ads to users. Until now.

For all its ubiquity, buzz, and presumed value, Twitter has yet to prove its ability to deliver relevant ads to users. Until now.

Relevance is the magic bullet in online advertising. Google and Bing have already shown how serving up an ad that you actually care about alongside your search query is incredibly valuable. And the viewing and social data behind those ads, gathered via YouTube, Facebook, and others, give advertisers the context to deliver even more targeted ads.

Today, Twitter unveiled its newest ad product, which enables "keyword targeting in timelines." Whereas before, Twitter targeted Promoted Tweets to users based on a variety of interest graph signals, such as who you follow on the service, now brands can serve up ads to users based on the content they're actually tweeting. Such keyword-based advertising will allow Twitter to take advantage of the endless troves of data shared and aggregated on the platform from third-party services--from other social networks, news outlets, and so forth--creating a centralized hub of opportunity for advertisers. "Until today, the content of tweets has only been one factor among many in shaping the interest graph," wrote Nipoon Malhotra, Twitter revenue product manager, on the company's blog. "Today, it becomes a first-class citizen."

The ad product is simple to grasp. Like traditional keyword searches we do on Google, advertisers can buy specific keywords to target certain users. "For example: let’s say a user tweets about enjoying the latest album from their favorite band, and it so happens that band is due to play a concert at a local venue," Malhotra explained. "That venue could now run a geotargeted campaign using keywords for that band with a tweet containing a link to buy the tickets. That way, the user who tweeted about the new album may soon see that Promoted Tweet in their timeline letting them know tickets are for sale in their area."

To set up a campaign, advertisers can choose the keywords or phrase they want to target. Next, they can set more specifics, such as the location or gender of a user, or what device he or she is using. Twitter says early tests of this new ad product yielded higher engagement rates. GoPro, for example, saw "engagement rates as high as 11%" when using keywords to target users on Twitter. Other early testing partners included Microsoft and Walgreens, which saw similar improvements to engagement rates.

The new ad product represents big potential for Twitter, especially considering how much data is shared through the service. Users are no longer simply sharing just 140 characters--they're exchanging links to music and videos; they're commenting on news and photos. In that sense, Twitter's new ad product can take advantage of these aggregated data sets--a huge advertising opportunity for the company. For example, if a user loved the band The Strokes, he or she might share a SoundCloud or Spotify link to a new song, or tweet out a link to the group's music videos on Vevo, or share a link to an upcoming concert on Ticketmaster--all of which would go through Twitter, giving advertisers the chance to push more relevant ads to users on the service.

It's also powerful because of the real-time nature of Twitter. "This is an important new capability--especially for those advertisers looking for signals of intent--because it lets marketers reach users at the right moment, in the right context," wrote Malhotra.

Take Twitter's relationship with Instagram, the photo-sharing service that Facebook acquired last year. Not long ago, Instagram ended the user ability to embed photographs on Twitter seamlessly, in order to drive more engagement on Instagram's website instead. Still, Instagram photos are still shared in mass on Twitter through links, as are the comments and captions that often come glued to such photos (along with their location data). Twitter can continue to take advantage of these shared keywords and serve up relevant ads based on them, despite its somewhat strained relationship with Instagram.

Because Twitter has tentacles attached to so many third-party services, its reach extends far beyond its own platform. Or as Malhotra wrote, "Advertising on Twitter works well because the experience is built into the fabric of the product."

[Image: Flickr user Fang Guo]

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