What does Twitter have as a secret jewel at its core, apart from its huge stream of personal observations, thoughts, news items, embedded links, and images in its largely public feeds? The intricate network of who you follow on Twitter, and who they follow and so on–exactly the same core value that lies inside Facebook. Twitter’s now about to leverage this network to improve its months-old Promoted Tweet program, because it contains a rich amount of information. For example, it doesn’t take much data mining in order to work out some of your interests by looking at common words you tweet, or frequently used phrases among your social network. All you’d need is a clever word- and link-hunting algorithm.
Twitter product manager Shiva Rajaraman revealed the plan at the Ad Tech conference in London, noting that the company was planning to augment Promoted Tweets with a “targeting mechanism” which is built on an “interest graph” with roots in “who they are following.” Part of the task for Twitter is also made easy, Rajaraman noted, because some 20% of Twitterers follow at least one “corporate entity,” and are thus likely to be interested in information pertaining to the business of that entity or others very much like it.
The actual mechanism Twitter will use is a secret, but we do know that it’ll be based on keywords too—so if you or your friends use the word “computer” a lot, you may expect to see more ads about IT. And Twitter’s been careful to note that an individual’s ID won’t ever be associated with a list of their interests. Instead it’s all about grouping similar folk together, so that as a whole they’ll be faced with similar adverts that may appeal to them more than untargeted ad placements.
Twitter will benefit from the enterprise by having a more valuable in-tweet ad system (though Rajaraman noted it was already working very well for a number of clients) that it can either sell at a premium, or use to encourage more ad partners to join the scheme. The ad partners, for their part, will gain more precisely targeted audiences for their ads, which delivers more bang for the buck in terms of message broadcasting, and which could translate into boosted sales. And Twitter users will benefit by being delivered more adverts that’re aligned with their interests, instead of broad-swath ad placements which may cut down on the annoyance factor, and (you never know!) actually link you up to a paid service which may be useful to you.
But there’s another thing to think about here: Twitter’s demonstrating it really is interested in cleverly monetizing its core strengths with this new scheme. It makes the company itself more than a mere clever social net, adding in a potentially thriving ad business and some high-level analytics. This definitely adds to the perceived value of the company as a going concern, which may or may not play into the company’s future plans to raise cash by a public or private sale.