Twitter Enters the Ad World

Starting today Twitter will roll out its first phase of a new advertising program that will deliver contextually relevant ads in a users search results. The ad platform is called “Promoted Tweets”. It will be the companies first foray into online advertising. The introduction is a huge step for the company. It is using its online presence to help turn the microblooging service into a money making venture.

According to AdAge and The New York Times, the platform will allow businesses to insert their ads into the Twitter stream in order to rise above the noise. It will start with search results, but later on will enter both Twitter.com streams and third-party apps such as TweetDeck (TweetDeck) and Tweetie (tweetie) (acquired by Twitter last week). Only one ad will be displayed at a time.

The first advertisers on the platform will include Sony, Best Buy, Bravo, Virgin America and Starbucks. Advertisers will bid on keywords based on a CPM basis initially, but later on Twitter intends to launch a “resonance score” metric that will judge how much reach and impact individual sponsored tweets have, based on favorites, retweets, and views.

The first phase will begin with search and depending on how users react to the Promoted Tweets platform, it could expand at the end of 2010. Future changes to the ad service could include showing the messages in users’ message timelines.