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July 3, 2013 10:01 pm
Twitter is planning to allow advertisers to use their own customer databases to show “promoted tweet” ads to people who have already shown an interest in their products or services, following Facebook and Google into the sometimes controversial “retargeting” business.
If deemed successful after a US pilot, the scheme will boost Twitter’s advertising rates without having to increase the number of ads it shows to a user, which is seen as important to ensure that people are not annoyed by too many ads in their feeds.
Twitter first introduced ads targeted to users’ assumed and stated interests, based on who they follow or what they tweet about, last August.
Its new targeting technology works by allowing advertisers to upload batches of website cookies or email addresses to Twitter’s ad platform. This is shared in an encrypted format to ensure privacy, but then used to match with the email address that a user entered when they signed up for Twitter.
The system will mean that customers who have signed up for a business’s newsletter, purchased products or visited its website can be targeted with ads that tempt them back, such as a coupon or discount.
Retargeting can improve an advertiser’s return on investment because ads are aimed at those who are already more inclined to purchase from that advertiser. For Twitter, a more relevant ad that a greater number of users click on means more income from advertising, which is paid for depending on the degree of “engagement”, rather than on simply how many people see the promoted tweet.
Twitter is expected to generate $582m in advertising revenues this year, almost double last year’s figure, according to analyst group eMarketer, and rising to almost $1bn in 2014.
Simon Mansell, chief executive of TBG, a social media marketing agency, said that a similar retargeting product on Facebook – known as “custom audiences” – was one of the best ways to advertise on the social network, prompting fivefold improvements over regular ads. Other advertising platforms, such as Google, Retargeter and Criteo, offer similar technology.
“One of the advantages of Twitter being the second big social network [to launch retargeting] is Facebook has already worked through privacy and legal concerns, which saves Twitter some time when launching new products,” Mr Mansell said.
Executives at Twitter say that they have taken steps to ensure greater protection for user privacy than its rivals in online advertising. Users can opt out of any forms of targeting in their account settings and Twitter adheres to “Do Not Track” options that are built into modern web browsers.
Twitter’s approach was endorsed by online rights group Electronic Frontier Foundation, which said its moves were “typical of the direction that major online companies are moving” but that it had made “some praiseworthy design decisions”.
“We think Twitter is setting an important example for the internet,” said Adi Mamdar of EFF in a blogpost. “It is possible to exist in an ecosystem of tailored advertisements and online tracking while also giving users an easy and meaningful opt-out choice. This is in stark contrast to many other advertising and tracking firms . . . We encourage more companies to follow their lead.”
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