What’s Your Tolerance for Twitter Ads?

It has taken awhile – probably too long – but Twitter is finally starting to deliver ads within the live streams of users.

In theory, these ads will subtly blend in, appearing as relevant and contextual as opposed to sticking out like a sore thumb.

The question is how much tolerance users will have for these ads. Will they accept them once every 25 tweets, once every 50 or once every 100? Right now, it’s hard to tell because the program has yet to go full-blast but the initial response seems mixed.

Some Twitter users have expressed various degrees of dislike for the idea, which isn’t surprising given they have enjoyed an advertising-free Twitter experience to date. On the other hand, there are some people who seem receptive to the idea, as long as it is not intrusive.

Like anything new, there will be different reactions Twitter will have to handle as its advertising business gains traction and more advertisers come on board.

At the end of the day, Twitter has little choice but to introduce advertising to monetize its 200 million users. In-stream advertising is such low-hanging fruit that Twitter can no longer afford not to enthusiastically embrace it as a way to finally create a business model to support its costs and the expectations of its investors.

Sure, there will be some grumbling from a minority of users but given Twitter has little choice but to accept advertising, any pushback will be the price of admission into a market that could prove to be lucrative.

At the end of the day, advertising within live streams will become part of the landscape – something few people will think about anymore or, for that matter, worry about it. After while, most people will probably stop noticing when ads appear in their Twitter streams. It’s not that they will ignore ads but the ads will no longer jump out every time they appear.

If Twitter can attract enough advertisers, it may be able to achieve the same kind of win-win scenario for advertisers and consumers as Google’s AdSense program, which has become a highly profitable multi-billionaire dollar machine.

The key will be making the in-stream ads so relevant they meet the specific interests of Twitters users and, at the same time, blend into the background because they seem like a natural part of the overall experience.

According to eMarketer, 600 companies were advertising on Twitter by June compared with 150 at the end of 2010. This is not a surprise given the size of the audience. It will be interesting to see how these ads are received and the benefits delivered to advertisers. Emarketer said 80% of advertisers have renewed their campaigns while the engagement rate for an ad has been an impressive 3% to 5%.

It will also be interesting to see how Twitter can grow its network of advertising partners, much like Google has done by striking deals with Web sites to run ads. If Twitter can make money from these partnerships, it could reduce some of the antagonism between the company and the developer community.

Despite it being early days, it would difficult not to see advertising becoming a major business for Twitter, which should relieve some of the pressure it has been experiencing as it scrambles for ways to make money.

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