The Next Frontier for Online Ads: Twitter

By the end of the year, Twitter will move over to an automated ad-buying system that will open the door for restaurants to advertise to Twitters 200 million users, according to company executives. When this happens, this will change everything for small businesses.

If you don’t believe me, look at the Twitter website for advertisers. See where you can choose your estimated monthly advertising budget. It’s set at $5,000 to 9,999. Way too expensive right? That’s a complete yearly budget for a restaurant’s advertising (probably all of marketing). So you go to select a smaller budget and soon realize there is no smaller category. You aren’t big time so Twitter doesn’t want your money. Yet.

Twitter doesn’t have a clue about small businesses, including restaurants. They have focused on major brands because they have up until this point run advertising through their sales department. Soon though, that could all change. Twitter is set to become an especially powerful advertising platform because it has a geo-targeting feature for advertising that may one day be very targeted. Think blocks rather than cities.

The automated ad system could work in numerous ways, whether by finding customers through links, keywords, location or previous preferences (or a combination of these). It will probably play out in a somewhat similar fashion as local search, coupling location with interest. If Twitter design this turnkey advertising feature right, advertising will move from macro conversations into micro conversations. This will lessen the intrusiveness and be more likely to offer customers something they may desire.

So far, Twitter has three ways to advertise Promoted Tweets, Promoted Trends and Promoted Accounts. Each recommends comments to users, labeling it Promoted (like Google Ads does). Twitter is still working on ways to make them more effective, but major corporations have had some success in reaching the Twitter community (which is probably closer between 10 to 20 million when you account for who uses Twitter on a regular basis). Experts estimate that Twitter’s ad revenue is between $125 to $175 million, suggesting to me that Twitter is still learning the advertising game and is tweaking their business model for more revenue.

Twitter is growing, even if people do not use it with the passion of Facebook. Yet. I imagine one day Twitter will hit critical mass. It may take one very important tweet. It may take some more acceptance by traditional media. But it’s inevitable (unless someone improve on the model). With automated ad-buying, Twitter may become a powerful way for restaurants to communicate with customers when they aren’t under their roof.  Restaurants, especially in urban areas that have younger customers, might soon be broadcasting themselves to the growing hoarde of Twitterheads just the same way as they do with other online titans.