AuthorStream: Powerpoint-Sharing for Tablets

It annoys me when I write a big post that doesn’t get read. I’m reposting here for those who might find the time. Comments are closed on this post. If you want to respond, please visit ReadWriteWeb for either Part 1 or Part 2.

Here’s a little secret about Twitter that you may not know: some people are getting paid to tweet. We don’t mean it’s their job to Twitter as the PR front-end for some large corporation, either. They’re actually getting paid to post advertisements to their Twitter stream. When their followers click though, the end result is cold, hard cash.

The Twitter ad industry, an experimental playground where new ideas about making money on the Internet flourish, is made up of a handful of companies who work with advertisers to run in-stream Twitter campaigns. Surprisingly, it’s not as unseemly as it sounds. For the most part, tweets are disclosed, backlash is minimal and the so-called “publishers” – the Twitterers, that is – are making a decent bit of pocket change. Just don’t count on banking 10K per tweet like Kim Kardashian allegedly did.

Diluting the Stream?

Twitter ads are 140-character missives posted to Twitter that link to an advertiser’s product or service. Some companies allow their users to craft the ad’s text itself while others insist on the advertiser’s own wording. But the end result is the same: someone clicks the ad, the Twitterer gets paid.

When first introduced, the concept of in-stream ads was met with backlash and disgust from many in the Twitter community. Advertisers were charged with “diluting the stream” with these irrelevant, unneeded posts. But these days, the backlash seems to be nearly forgotten. Anyone who was offended by someone tweeting ads simply unfollowed them and went on with their life. In fact, that’s the beauty of the Twitter system – if you don’t like what someone says, they’re gone with a click of a button. And when it comes to ads, the reality is that enough people don’t mind (or perhaps don’t even notice) to make the occasional promotional tweet worthwhile for publishers using these systems.

Beyond Kim K: Real Users are Making Money

There a good handful of companies where a Twitter user can sign up to start advertising to their friends and followers including Twittad,Magpie, Sponsored Tweets, and Ad.ly to name a few. Since the influx of celebrities to Twitter, these companies have become more prominent – Ad.ly and Sponsored Tweets even list some of their celeb publishers right on their homepage. Those lists include everyone from reality stars like Audrina Patridge to artists like Soulja Boy. Take a quick dive through their publisher lists, and it almost seems as if there isn’t a single celeb who hasn’t signed up somewhere to monetize their fanbase.

But a celebrity and their 1.5 million followers isn’t the average user of these services. Instead, the average user is relatively popular within a niche crowd. For example, Magpie reports their average user has follower counts in the three or four digits. Sponsored Tweets says their average user is right around 2500 followers. Obviously, these folks have more than a handful of close friends watching their streams, but they don’t come anywhere near celebrity status.

Yes, but How Much Money do People Make?

But the real question everyone wants to know is what do people make? Real people? The answer to this question isn’t as simple as quoting an industry average figure. Reports of the $10,000 tweet from Kim Kardashian have people salivating, yet this is far from reality. (Side note: Ad.ly, the company behind that tweet, doesn’t actually disclose what their users make per tweet. Sean Rad, Ad.ly’s CEO, will only say that publishers “can make as much as five figures.” Sponsored Tweets, meanwhile, boasts of a $20,000 payout.) However, outside of Hollywood starlets, musicians and other famous figures, tweeting for cash isn’t some get-rich-quick scheme.

Sponsored Tweets says their average payout is $10 per tweet and a user usually gets just a couple of offers per month. Magpie says their users can earn three-figure amounts per month, most in the $100-$300 range. Twittad says their average payout is $15-25 per week. None of these payout amounts are enough money to quit your day job over, but they can easily add up to tidy second income for their users.

And if you grow your Twitter following, you can earn even more. John Chow isn’t exactly a Hollywood celeb, but he does tout a follower count of over 50,000. While nowhere near Kim K. numbers, it was enough for his first tweet to earn him $1000 when he signed up with Ad.ly. But simply boosting your follower count isn’t enough to be the next John Chow or Jeremy Shoemaker who claims he earned 14K in a month – it all depends on who follows you back and how engaged they are. Without active followers clicking through on your ads, you’ll be lucky to earn a dollar.

You can get paid to tweet. Average, non-celebrity users are making some decent pocket change using Twitter ad services like Twittad,Magpie, Sponsored Tweets, and Ad.ly. And while reports of $10,000 tweets abound, average users are pulling in much smaller amounts, usually three figures at most.

But aren’t these programs rewarding scam artists who boost their follower count through artificial means or sneak in ads that look like regular tweets? Surprisingly, for the most part, the answer is no.

Paid Tweets: Not a Gold Rush for Most Users

Janet Thaeler only has around 7400 followers on Twitter which puts her far from celebrity status. Occasionally she’ll tweet a relevant ad to her engaged followers, averaging around two per month. They’ve never brought her big bucks, though. The most she’s ever been paid is $20 per tweet.

Tim Kissane is in a similar boat. With only around 6000 followers, he’s not tweeting to a massive crowd. The least he’s been paid is $2 per tweet; the most is $38.50. Tim says that none of the services he’s tried, which include Sponsored Tweets, Magpie and Twittad have earned him any “significant revenue” and dubs his payouts “chump change.” Tim says that’s he’s disappointed with the services. “Unless I drop my price significantly, I will receive no offers,” he laments. “For instance, Twittad estimates my ad value as ~$471/month.” However, “the few offers I get average $8-$12/week. And even those are scarce.”

But perhaps Tim, like many others, was expecting paid tweets to serve as a steady source of secondary income when it is, in reality, no more than the Twitter equivalent of an online display ad similar to those you would see on someone’s blog.

In fact, that’s the very model that Ad.ly hopes to reproduce with their system. Instead of promoting the whole “conversational marketing” mumbo-jumbo which purports that people will buy from companies their friends recommend, Ad.ly says their system is the Twitterized version of the already successful display ad model. As with bloggers hosting ads on their site, Ad.ly thinks that Twitter users should be able to monetize their content too. However, unlike display ads, Twitter CTRs (clickthrough rates) are much, much higher. Five times the industry average, says Ad.ly CEO Sean Rad.

Other Twitter advertising companies report similar high levels of engagement. Magpie even claims their average clickthrough is the unheard of 2%. Twittad says their click to conversions (aka “call to action”) is well above 8-10%.

Rewarding Engagement, Not Just Numbers

A consistent factor among the majority of the companies is the use of systems and algorithms that take into account not just raw follower counts, but the engagement levels of those followers. Ad.ly’s algorithms, for example, look at the quality of someone’s followers to determine what prices to pay. Too many spammers and bots following you and the payout goes down. And if you’re a spammer – in other words, tweeting out too many ads yourself – the price goes down even further. So far, in fact, that you probably won’t even find using their system worthwhile. Magpie and Sponsored Tweets, too, say follower counts are not how they determine success. Twittad’s formula also looks beyond follower counts to see how active a certain Twitterer is before determining their payout amount. In other words, you can’t simply turn on auto-follow via a third party service and boost your follower count to high levels and then expect to start earning money. Only real, engaged users communicating to a real, engaged following are rewarded via these programs.

Disclosure: Are Ads Sneaking into Your Stream?

Another surprise is how strict many of the companies are about following the rules of disclosure – that is, making sure tweets are labeled as ads in some way, shape or form. Each company involved has their own method for this, however, some are more obvious than others.

Magpie requires their users to choose between #ad, #advert, #sponsor, etc. until a definitive recommendation from either the FTC or WOMMA (Word of Mouth Marketing Assoc.) is established. Sponsored Tweets uses a disclosure engine that makes their users choose from a set of options, too, which includes #ad and many others. Ad.ly users have “(ad)” placed in their tweets for them and, even better, their ad messages can’t be rewritten by their users – the system automatically sends out the tweets, disclosure and all. Twittad, on the other hand, doesn’t require disclosure but uses a “sponsor URL” of http://spon.in. Click through on any Twittad link and a banner at the top of the page appears reading “providing disclosed sponsorship in updates.”

However, there are still ways around some of these disclosure systems. For example, prolific Twitterer John Chow notes that with Sponsored Tweets, you can reword the ad however you want. Since they allow you to use “brought to you by” as one of the disclosure mechanisms, you could write: “Hey guys! I found this great $1.99 web hosting deal bought to you by bluehost. Go check it out. URL” and get away with it.

This tricky workaround to the disclosure requirements, not too mention the various methods employed by the companies to meet disclosure requirements, are one main area that needs improvement. Consistent guidelines for paid tweeting should be established and adhered to by all companies involved. Without standards, it’s a lot easier to mistake an ad for a regular tweet if you’re not paying careful attention.

Companies are Paying, but Issues Remain

Despite the grumblings in the Twitter community about how paid tweets will start mucking up the stream, advertisers haven’t been afraid to get on board and give pay-per-tweet ads a shot. The Twitter ad companies have all worked with major brands including Sears Holdings (Twittad), Hershey’s (Magpie), Sony Playstation (Magpie), LG (Sponsored Tweets), Volvo (Sponsored Tweets), Talbots (Sponsored Tweets), Sony Electronics (Ad.ly), Ralph Lauren (Ad.ly), Bing (Ad.ly) and Bookrenter.com (Ad.ly), just to name a few.

Still, not everyone is happy with their results. Deborah Blake with IntroSpectrum has just started using Sponsored Tweets and Magpie. With Google AdWords, she’s seeing right around $.50 CPC (cost-per-click) but through Magpie she’s seeing about $3 CPC. Sponsored Tweets is about the same, she says. Also, Magpie reports 0.65% CTR for the campaign, but the company’s own analytics indicate a much lower rate. She can’t be sure if their internal analytics are missing some clicks or if Magpie is over-estimating, though. However, the CTR is much lower than Magpie’s claimed average of 2%.

However, even Blake is willing to give the Twitter ad agencies the benefit of the doubt. “I want to emphasize…this is a pretty small sample size so far, and besides that our AdWords campaigns have been optimized over the course of many months…,” she notes. “We can’t draw any firm conclusions yet, but my expectations are that quality traffic through Twitter advertising will be significantly higher cost than traditional online channels.”

In the end, it’s probably still too soon for advertisers to truly get a grip on whether the quality traffic from Twitter ads is worth the price. While it’s one thing to track clickthroughs and conversions, it’s much harder to track the positive or negative feelings generated by ads that may impact sales further down the road. For now, though, it seems some advertisers are willing experiment, some Twitter users are willing to tweet for pay and surprisingly, some Twitter users are willing to follow those that do.