According to CEO Dick Costolo, Twitter has become "a remarkably successful business." And judging by the price the company is now charging for Promoted Trends, his statement just might be believable.
That price: according to Twitter's director of revenue, $120,000. Not bad for a company that many of us used to question the financial viability of on a regular basis.
Of course, the fact that Twitter is getting advertisers to pony up six figures for Promoted Trends doesn't mean that they're actually worth it. The brand marketers experimenting with these ad offerings have big budgets, and aren't afraid to experiment with them.
For Twitter to keep the money rolling in long term, there has to be ROI.
So how are Promoted Trends performing?
In the past, reviews of Twitter's ad offerings have been somewhat mixed. But according to VentureBeat, Costolo recently told the audience at the D9 conference in California that Radio Shack "saw a double-digit percentage increase in purchases and exchanges" in the days following its Promoted Trend.
Is correlation cause? Obviously, without more information about Radio Shack's other marketing campaigns ongoing at the time, it's impossible to conclusively attribute the bump in business to the Promoted Trend on Twitter, meaning the $120,000 price tag will still likely look expensive to some.
But Twitter doesn't necessarily have to show that cause is correlation, and advertisers shouldn't necessarily ask it to. As evidenced by the increasing interest in marketing attribution, marketers are realizing that multichannel campaigns need to be assessed holistically.
Social media, for instance, may not produce a whole lot of the 'last clicks' that produce sales, but that doesn't mean that social ads like Promoted Trends aren't meaningfully correlated with sales.
If Twitter and marketers can establish a correlation between Promoted Trends and sales, and it's meaningful in any way, it may help change the way publishers and marketers think about various types of ad inventory, and how it should be priced and sold.
What looks expensive may not always be so, and what looks cheap may not always be cheap. We may yet discover that $120,000 per day for a couple of words is a bargain, and a $15 CPM for an in-your-face animated interstitial is a rip off.
Reader comments (3)
Senior PPC Analyst at Epiphany Solutions
3:04PM on 10th June 2011
Wow - I never envisaged it would cost as much as $120k per day to run one promoted trend!
The figure seems particularly high considering promoted trends seem to be so poorly targeted half the time. The amount of times I see a promoted trend for brands or events in the U.S when I'm a UK Twitter user is pretty staggering. Does anybody know if Twitter has plans to allow greater targeting of its promoted suite of products by location, or if that will even be possible?
As an advertiser, this would make them much more appealing.
As for Radio Shack's supposed results, I too am a little dubious - I'd be interested in hearing results from a few more brand that have been running promoted tweets and trends. (I wonder how SlimFast fared after its $120k Royal Wedding Promoted Trend!)
1:23AM on 11th June 2011
I agree that 120k is quite a rip off. I've also struggled to see where Twitter makes it money to warrant its valuation.
As a Twitter user, I don't even look at the promoted trend, never mind ignoring it.
3:54PM on 8th January 2013
I agree with most of what has been said. It is difficult to see how Twitter has come up with this figure. Right off the bat it seems like an investment that may be too large to warrant the risk.
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