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A sponsored tweet on Perez Hilton’s feed

If Twitter the company is not interested in putting advertising in its product right now, other companies have proven they can do it on their own. There has been an explosion of startup companies that place “sponsored tweets” into Twitter feeds and split the ad revenue with Twitterers. The first one to sell ads into Twitter feeds, Magpie, says its network now reaches more than 15 million followers. And Mediabistro.com is now giving job advertisers the option of putting their ad in the @mediabistro Twitter feed for a fee of $97.

Those considering advertising on Twitter feeds or running ads in their feed often struggle with deciding which service is right for them. There are dangers and pitfalls of running advertisements on your Twitter stream, such as potentially turning off loyal followers. To help you grapple with this thorny issue, I’ve put together a rundown of some of the major Twitter ad networks. After talking to some of the folks who run these networks — as well some Twitter fans — I also developed eight tips to help you get the most out of sponsored tweets.

Guide to Twitter Ad Startups

Ad.ly
Tagline: “In-stream advertising platform that matches top-tier Twitter publishers with top-tier brands.”
How It Works: Runs advertiser message in feed once per day for seven days.
Ad Copy: Written by advertisers; Twitterer accepts or rejects.
Pricing: Twitterer sets price per tweet.
Revenue Share for Ad.ly: Unknown.

Happn.in
Tagline: “Put your ad in a local Twitter market.”
How It Works: Local sponsored tweet ads run in Twitter feeds set up by Happn.in for each city.
Ad Copy: Written by advertisers.
Pricing: From $2 to $10 per city per day, depending on the number of followers in that city.
Revenue Share for Happn.in: They get it all because they run the Twitter feeds.

Magpie
Tagline: “Magpie, the original Twitter advertising network, assists brands to harness the power of conversation.”
How It Works: Matches your campaign key words with specific Twitterers.
Ad Copy: Can be rephrased by Twitterers with approval of advertiser.
Pricing: Depends on “the competitiveness of the topic you are wanting to tweet about, the number of followers a Twitterer has, the demand for this Twitterer and your indicated maximum CPM,” according to the site.
Revenue Share for Magpie: Not disclosed but Magpie CEO Jan Schulz-Hofen told me “we always give more to the Twitterer than we take out for ourselves.”

TweetROI
Tagline: “TweetROI unites influencers with marketers and protects the authentic personality that makes Twitter great.”
How It Works: Lets advertisers bid on Twitterers by their rank in four categories: overall, frequency of tweets, viral (number of RTs), and conversation (number of @ replies they get).
Ad Copy: Written by Twitterer, but advertiser can require approval prior to publication.
Pricing: Depends on the bids for Twitterers, which are placed in a Google AdWords-style system.
Revenue Share: Not clear, but TweetROI CEO Brian Carter told me the Twitterer will be getting about 50 percent of ad revenues in the upgraded system.

Twittad
Tagline: “Twittad is a social media affinity network that connects advertisers and Twitter users.”
How It Works: Advertisers place ads on Twitterer’s profile and in three tweets over seven days.
Ad Copy: Written by advertiser, with input by third-party social media strategists.
Pricing: Tiered approach. If a Twitterer has more than 20,000 followers, they get $20 for a seven-day campaign. Those with 3,000 to 20,000 followers receive $7 to $10, and Twitterers with 400 to 3,000 followers get $2.
Revenue Share for Twittad: 15 percent transaction fee from advertiser.

Sponsored Tweets
Tagline: “Sponsored Tweets is a new Twitter advertising platform that connects advertisers with tweeters.”
How It Works: The focus is on “celebrity” Twitterers, from Holly Madison to Chris Pirillo, who set the price per tweet or click.
Ad Copy: Twitterer has option of using advertiser’s message or creating their own (with approval of advertiser).
Pricing: Set by Twitterer.
Revenue Share: Unclear.

Eight Tips for Successful Sponsored Tweets

1. Protect your reputation.

The allure of running sponsored tweets in your feed is that you are getting paid to endorse a product just like a famous celebrity (and that all those hours spent on Twitter might give you some payback). But before you start running ads, think about how your followers might react. One Twitter user, Will Carroll (@injuryexpert), sent some sponsored tweets and here’s what he told me about it via Twitter: “Yep. I did. Lost followers net. Stopped.”

Brian Solis is a principal at FutureWorks PR, writes the PR 2.0 blog and contributes to TechCrunch. Solis has written extensively about Twitter ad startups, and says that there should be a Surgeon General-style warning for brands and Twitterers before they start running ads.

“You have to consider the risks involved,” Solis told me. “If you have people tweeting on your behalf, and you are paying them to do so, eventually it starts to compromise the ethics and credibility of what you’re supposed to stand for… You have to think about how your brand is associated on Twitter. It’s such a volatile community — they either love you or turn against you.”

2. Beware of systems based on pay-per-click.

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Jan Schulz-Hofen

While Google AdWords has made a mint using the pay-per-click system of advertising, the same isn’t true for Twitter ads. Because it’s a newer platform, there still aren’t trustworthy third-party measurement systems to show when a click is from a human, and not a spider or bot. Brian Carter, who runs TweetROI, told me about an advertiser who decided to go with Magpie because they were getting the most clickthroughs. “They did Magpie only for a week but got way less action on their Facebook and social media page than when they were running on [TweetROI] and Izea [Sponsored Tweets]. We know that clicks aren’t really where it’s at.”

Magpie CEO Jan Schulz-Hofen told me that they redirect clicks through their own servers to eliminate duplicate clicks and they “filter out bots by using learning heuristics mechanisms which we’re constantly improving.”

Others believe clicks are not the way to go. Twittad CEO James Eliason told me the time wasn’t right yet for pay-per-click systems, but that Twitter the company could help combat click fraud.

Henry Copeland, who runs BlogAds, told me he measures Twitter ad campaigns on @PerezHilton’s feed with the number of retweets and contest entries. BlogAds prices its Twitter ads using a CPM based on follower counts. But the problem with that system is that not every follower is seeing every tweet.

3. Clear transparency and disclosure are important.

With the FTC recently ruling that bloggers and social media denizens need to fully disclose paid endorsements or freebies, people on Twitter will need to be very clear about what’s an ad and what’s an opinion. A paid tweet saying: “I really love that new sandwich at Arby’s!” will need to read: “(Sponsored Ad) I really love that new sandwich at Arby’s (Sponsored Ad).” Many of the services listed above say they are in compliance with the new FTC rules, and Twitterers — and advertisers — will have to make sure the rules are followed.

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Alan Mairson

“Sponsored tweets undermine the credibility and trust in a virtual community — especially if there’s not full disclosure of who is getting paid by whom,” said Alan Mairson, a freelance journalist, Twitterer and SocietyMatters.org blogger. “In a world where people get cash to croon about ‘name of product here,’ it’s natural to become suspicious about who else might be taking payola. And without the trust, and, yes, the transparency, the network loses its value.”

4. Ads perform better on smaller networks.

You might think that celebrity endorsers with tons of followers get the best responses on their Twitter ad campaigns. That’s not the case, according to several ad network bosses. Magpie’s Jan Schulz-Hofen, who has been running ads in Twitter feeds the longest, was surprised by how well small networks performed.

“Interestingly, the best results in terms of engagement and conversion is being generated by those Twitterers with the smaller accounts,” he told me via email. “Smaller accounts tend to have a more hands-on approach with their followers and this results in a higher interest in advertised tweets. While the initial reach per post may be smaller, the response is overwhelming when compared to larger or celebrity Twitterers.”

5. Go beyond a simple product pitch.

Because of poor tracking of clicks and the weakness of the CPM model, Twitter ads perform best when they include contests, prizes and special twists. BlogAds’ Copeland says that he has run contests on Perez Hilton’s feed.

“Twittering is all about playing with networks of followers, with the asymmetry of the pools of who follows whom,” he said via email. “You have to wrap sponsored tweets into something else — a contest, or something that the followers can retweet and interact with — to make things really interesting.”

Magpie’s Schulz-Hofen says advertisers need to also think beyond the tweet content to the all-important landing page beyond the click.

“We are talking about a pull marketing strategy here — not a hard sell, push,” he said. “Highlighting a new, controversial, or otherwise interesting fact about a product is much more valuable than just asking people to ‘click here’ or ‘buy now.’ But the actual secret to the success of a campaign is the landing page, how the advertiser intends to engage the Twitterer once they have clicked on the ad link.”

6. Ads should be conversational.

While most advertisers would like to control the message they are paying for on Twitter, they also need to consider how that message fits with the usual voice of the Twitterer. A blaring marketing pitch might be jarring next to mellow tweets from a bird-watcher (hello, @craignewmark). Many systems such as Magpie and TweetROI allow the Twitterer to write their own ads, with the advertiser’s final approval. In fact, Magpie’s Schulz-Hofen says that rephrased Twitter ads on his service perform 32 percent better than ads written by marketers.

Social media consultant Scott Allen has helped rewrite some sponsored tweets that have run on Twittad. Allen told me that simple ads work best.

“Classic marketing call-to-actions like ‘Sign up now!’ are not good,” Allen said via email. “I saw another proposed tweet copy that mentioned when the company was founded — what customer would know (or care) about that? Some of the best ones are short and sweet. For example, one of the campaigns was a chance to win a weekend spa vacation, including airfare. One of the most effective tweets was simply: ‘I so need this: .’

7. Beware of fake Twitter accounts and spammers.

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James Eliason

Because each Twitter ad network is promising people they can make money off their Twitter feeds, it’s no surprise that fraudsters have been among the first people to sign up for these services. They set up hundreds of free Twitter accounts, have them all follow each other, and then run tons of ads. Twittad’s Eliason told me his service vets every single Twitterer before accepting them into the system. “There are some accounts where it’s the same exact person using Twitterfeed to send it out into multiple feeds at the same time,” Eliason said. “Those are the people we don’t accept into our campaigns.”

TweetROI does not vet the Twitterers who run ads in its system, but relies on its user-ranking system to show advertisers who might not be up to snuff. TweetROI’s Carter told me that anyone with the lowest ranking, 1, in the viral (number of retweets) or conversation (number of @ replies) categories is likely a spammer, and that advertisers should avoid using them in campaigns.

8. Too many sponsored tweets will turn off followers.

Just because you can join multiple Twitter ad networks doesn’t mean you should. In fact, too many ads will likely defeat the whole purpose of maintaining a Twitter feed in the first place. TweetROI’s Carter says the domino effect of running those ads could be devastating.

“If you send out too many ads, you will turn people off, meaning engagement goes down, your rankings go down and you’ll make less money in the system,” he said. “There are people who send out a lot of marketing messages and are listened to by other marketers, but that isn’t a large segment of the population.”

More Reading

Ad.ly Brings Sponsored Tweets From Celebrities at TechCrunch

Brought to You by Twitter at Time

Find a ‘Tweet’ Deal on Advertising= at US News

Full Disclosure – Sponsored Conversations on Twitter Raise Concerns, Prompt Standards at PR 2.0

How Perez Hilton and Blogads are monetizing Twitter at Bloggasm

Marketing Startups Get Serious About Twitter at InternetNews

Twitter Advertising – Pay for performance at TechCombo

Twitter & Advertising — Do These Two Really Belong Together? at Addme.com

Sponsored Tweets – a case study in Twitter marketing fail at Econsultancy

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What do you think about sponsored tweets? Would you run them in your feed? Why or why not? What’s your experience been with the services listed here or others? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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