You know, I remember a time when Twitter was trying hard to find itself a monetization model. Ads were apparently out of the question, celebrities were cashing in with sponsored tweets, and spammers... well, spammers will be spammers no matter what the platform. Then, in a stroke of genius, Twitter decided to make money by having companies bid or pay for various promotional facets, like "Promoted Trends."
In a revealing article posted on ClickZ on June 7th, Twitter director of revenue Adam Bain (not the guy pictured in the upper right-hand corner of this article) details a great deal of Twitter's current monetization model. To quote:
Big dollars come in from brands like Toyota, HBO and Samsung - all of which have run a Promoted Trend recently; however, Twitter aims to bring in smaller and mid-market brands through its inside sales team as well. The firm's Promoted Accounts and Promoted Tweets offerings are auction-based while Promoted Trends now cost $120,000 per day - up from $25,000 to $30,000 at launch in April 2010, according to Bain. The company also recently began requiring that advertisers spend a minimum of $15,000 over three months on bid-based Promoted Accounts and Promoted Trends offerings.
Yes, you read that correctly. The current cost of a Promoted Trend for a day is a whopping $120,000. For added perspective and emphasis, that's more than the average American will make in 3-4 years... before taxes!
That's one heck of a price to jump to with such a relatively young service, but it's clear that Twitter means business and has flourished into a formidable avenue for advertisers to consider. With Facebook being perhaps the most immediate competition people would assume Twitter has to worry about, ClickZ addressed this by quoting Bain's juxtaposition of their services and Facebook's. To quote:
Bain suggested Twitter provides advertisers with higher engagement levels than Facebook. He also suggested it's better at reaching consumers than display ads because with display, "You're just in the sea of trying to catch people through media impressions when they're on different sites across the web."
To prove his point, Bain pointed to the Promoted Accounts offering, which allows advertisers to pay per follower based on a bid system. "Paying $4 for a follower is a pittance because the ROI is insane. Because again once they have a follower, they can keep marketing to that guy as many times as they want without worrying about where they are across the web or what kind of mindframe they're in," suggested Bain.
With such high price tags as entry points into Twitter's advertising services, it's clear that Twitter intends to attract and maintain quality partnerships. And although that may spell less income for them in the short term, it may just be the best move for themselves and their users in the long term. Could you imagine if Twitter had a completely open platform that any old spammer could leverage? It's bad enough to receive all the @ spam so many users do.
Regardless, just keep in mind that, unless/until Twitter changes their price, every time you see a promoted trend in Twitter, that buyer paid $125,000. "Do you accept... CASH? *Cha-ching!*"