Twitter Inc on Wednesday unveiled a new tool that allows marketers to disseminate targeted messages based on the content of users’ tweets, a technology that could help elevate Twitter’s effectiveness as an advertiser to a rarefied level demonstrated only by digital advertising leaders like Google Inc.<\/p>\n
Twitter’s advertising business is relatively modest and is likely to generate 2013 global revenue of under $600 million, according to the consultancy eMarketer.<\/p>\n
But the fast-growing social networking company, which has 200 million users around the world, hailed its new tool as something of a technological breakthrough: until now, Twitter has been able to decipher a user’s interests largely by analyzing the list of accounts he or she follows, otherwise known as the “interest graph.”<\/p>\n
The new tool allows marketers using Twitter to delve into the content of a user’s tweets to show the most relevant ads.<\/p>\n
A band on tour may now send automated, paid ads about their next show in Chicago, for instance, to any Twitter user in Chicago who has tweeted about that band.<\/p>\n
Early tests of the new keyword-based targeting mechanism showed that in some cases, users clicked on ads 11 out of 100 times they were shown, a remarkably high rate in the realm of digital advertising, according to Kevin Weil, a senior director of product at Twitter.<\/p>\n
That click rate “shows the power of the intent expressed in users’ public tweets,” Weil said.<\/p>\n
The new ad tool could also take advantage of the existing ubiquity of “hashtags” — the pound sign that Twitter users include to signify a topic of discussion, to deliver ads.<\/p>\n
“It’s already used today as a way to focus conversation,” Weil said. “Now it’s also a way for users who are talking about something to see really relevant.”<\/p>\n
The push to refine its advertising products comes as Twitter, valued at $9 billion by private investors, prepares for an IPO as early as 2014.<\/p>\n
The new technology echoes the search ad technology employed by Google, which for years has proved hugely effective because it shows relevant ads based on precisely what a user has searched for.<\/p>\n
Another online advertising leader, Facebook Inc, shows ads based on what a user has “liked,” among many other signals.<\/p>\n
In a blog post Wednesday, Twitter said the new keyword targeting technology would be available globally to marketers in 15 languages.<\/p>\n
The seven-year-old company, which did not establish a viable business model in its early years and suffered from management turmoil, has aggressively ramped up its revenue-generating capabilities in the past two years under the direction of Chief Executive Dick Costolo, who assumed leadership in 2010.<\/p>\n
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