In July 2011, social media users began noticing unexpected guests in their Twitter streams. Nestled among messages from friends and colleagues were a mysterious new breed of Promoted Tweets: 140-character ads dressed up to look – apart from tiny disclaimers – just like honest-to-goodness Tweets.
Fast-forward less than two years and Promoted Tweets, along with equivalents from Facebook and other social networks, are now officially among the fastest growing sectors of online advertising. Spending on so-called “native” social media ads is forecast to nearly triple from $1.5 billion this year to $3.9 billion in 2016, according to a new report by market analysts BIA/Kelsey. Meanwhile, Nielsen reports that three-quarters of all advertisers have jumped on the paid social media bandwagon, pulling funds out of traditional banner ads and other online channels.
The reason: Native ads have shown engagement rates that leave traditional banner ads (the boxed-off “digital billboards” ubiquitous on most websites) in the dust. While banner ads are now virtually ignored (clicked on a mere 0.2 percent of the time), Promoted Tweets show engagement rates of one to three percent – proving up to 15 times as effective.
Why the difference? Native ads seem to have done the impossible: make the experience of advertising – so grating to consumers, so costly to companies – just a little more bearable.
For starters, the best native ads often spring from actual Tweets that have already proven themselves witty, worthy and shareable on Twitter. A brand like Volkswagen or MTV, for instance, might send out dozens of ordinary Tweets a day to its followers. Using basic social media analytical tools, they can see which of these messages are actually clicked on and retweeted. (Disclosure: My company, HootSuite, offers these tools). The best of the bunch can then be amplified further as Promoted Tweets – shared not just with followers but the rest of the Twitterverse. For consumers, this means fewer annoying ads and more content that just might be interesting enough to look at. And for companies hoping to stretch limited ad dollars, this takes the guesswork out of forecasting which messages will resonate with buyers and which will fall flatter than New Coke.
Then there’s the targeting sophistication. One of the major rubs with traditional ads is inefficiency. Every time a die-hard Prius owner sees an ad for an F-150 pickup it represents a major waste of his time and Ford’s money. With Promoted Tweets, this kind of spillage doesn’t have to happen. Companies can drill down to microtarget users – either their own followers or people “like” their followers – based on literally hundreds of different interests, everything from adventure travel and reptiles to Bollywood and tech start-ups. Tweets can be targeted by country and city, gender and even device. If so inclined, a brand could blast out a Promoted Tweet to female Blackberry users in Tanzania whose interests include enterprise software and college basketball. Meanwhile, companies only pay when users “engage” with the Promoted Tweet in some way, i.e. by clicking on a link or retweeting it. That degree of marketing precision – in any other medium – is hard to imagine.
Couple that with another critical perk: agility. Twitter – with its ephemeral memes and viral hits – is a fickle and fast-changing medium. Companies hoping to leverage this week’s Harlem Shake before it becomes last week’s Gangnam Style are obligated to execute ad campaigns in real-time. And it’s here that native ads really shine. Members of an organization can log in at any time, create a message and instantly push it to a global audience as a Promoted Tweet. An eBay-style bidding system means prime ad spots always go for the lowest price, minimizing ad spend. The time-consuming (not to mention pricey) requirements of traditional ad campaigns – design teams, creative agencies and media buyers – can, in some cases, be dispensed with or pushed to the sidelines.
And the process is getting easier. Twitter announced on Feb. 20 that it’s now sharing its Promoted Products API (the technology for placing Promoted Tweets) with external social media management tools. Using cloud-based software like HootSuite, for instance, companies can now send out tweets, analyze the results and then – with a click – amplify the best messages as Promoted Tweets. Apart from convenience, these tools also offer significantly beefed up planning features – a nod to the fact that native ads are commanding a bigger chunk of marketing budgets and strategy. Whereas before Promoted Tweets had to be placed one-by-one, now entire campaigns can be drafted, scheduled and bought from one screen. HootSuite even allows ad agencies, content producers and company executives to collaborate inside one tool on native ad campaigns, which can easily run to tens of thousands of dollars daily for large consumer brands.
Critics are quick to point out, however, that a backlash may be brewing. In a medium where community – not dollars – has been the prevailing currency, native ads are bound to ruffle feathers. And as Promoted Tweets and other forms of native ads become more prevalent, users may come to resent the intrusion on their personal streams and news feeds. There’s also the novelty factor to consider. Banner ads, back when they premiered in 2000, boasted a click-through rate of nine percent. Eventually, however, viewers learned to simply tune them out.
Does the same fate await native ads? The trifecta of lower costs, better targeting and more engaging content suggests they may be around for the long haul. Plus, there’s plenty of room to grow. In the near future, expect the emergence of tools for buying Twitter, Facebook and other native ads from one-stop-shopping-style interfaces. Companies will be able to compare, say, price and projected reach of a Twitter Promoted Tweet versus a Facebook Promoted Post, buy ads, then run analytics reports to see which campaign delivers better. Social media management systems might offer push notifications to buyers when selected keywords start to trend on Twitter, enabling them to get a scoop on ads featuring those words. Some type of stock-market-style limit-order system is even foreseeable – with social ad buys executed automatically when prices dip below a set point.
Ultimately, however, whether Promoted Tweets and other native ads end up a marketing revolution or just another annoyance will depend on how they’re used. Companies that “get” social media – and have the tools to draft, publish and analyze compelling messages, then turn the best ones into ads – will reach new customers and connect better with existing ones. Meanwhile, companies that clog up Twitter streams and Facebook feeds with the same old sales pitches may well get an unpleasant surprise – social media users ready, willing and able to push back against boring ads.
Get more insight into the state of social media, by following Ryan on his LinkedIn Influencer blog, a new resource that brings together regular insights from hundreds of thought-leaders around the globe.
Learn about HootSuite’s Twitter Promoted Products integration.
Image: West McGowan