Social media platforms has always been keen on their advertising efforts to increase revenue.
Twitter, an online social networking service and microblogging service that enables its users to "tweet", slashes the price of promoted tweets and will sift through messages to discern users' specific interests.
Twitter will begin allowing advertisers to directly target users based on the interests they reveal in their tweets, the social media company has announced. Twitter will sift through its users' 400 million daily tweets to allow advertisers to target them with specific products.
The company hopes to catch up to other internet brands that have had varying degrees of success in using technology to serve better-targeted ads.
For years, Google has made huge profits by displaying ads based on what a user looks for in its search engine, while Facebook encourages users to "like". Twitter, by contrast, has long faced the challenge of indirectly inferring these preferences, something that marketers find less attractive.
The new offering will allow companies to reach a very narrow, specific and incredibly focused audience.
Twitter believes that with a compelling ad delivery platform that blends with the tweet format, can reach its 140 million monthly active users.
Twitter's CEO, Dick Costolo, has said that the company's value lies in its ability to mine its flow of information to build an "interest graph" showing its users' preference profiles. This interest graph can be used by marketers to deliver targeted and relevant ads.
Twitter now allow advertisers to send paid ads, in the form of tweets, to users who are interested in any of the roughly 350 topics on a list curated by Twitter itself.
Although about 1 to 3 percent of users who see a promoted tweet – a paid ad – click on the tweet, early tests have shown an increase in engagement rate when tweets are directed using its new targeting tool.
Twitter that is currently worth more than $8 billion is expected by analysts to make roughly about $300 million in revenue in 2012 with its increased advertising capabilities. To make it better in showing ads, Twitter has revised how third-party services may use its content.