Twitter Launches Ads Targeted To Interests–Starting At A Penny

From my Forbes.com blog The New Persuaders:

Until now, advertisers could hit Twitter users with ads only if they followed the company or users Twitter deemed to be similar to those followers. That limited the potential reach especially for large brands looking to advertise to many millions of people.

Today, the company announced that marketers can now target the service’s 140 million users with ads, called Promoted Tweets and Promoted Accounts, based on their interests, inferred from their retweets and whom they follow, and other undisclosed qualities it uses to create its “real-time interest graph.” From the announcement, here’s how it works:

There are two flavors of interest targeting. For broader reach, you can target more than 350 interest categories, ranging from Education to Home and Garden to Investing to Soccer, as shown in the screenshot below. As an example, if you were promoting a new animated film about dogs, you could select Animation (under Movies and Television), Cartoons (under Hobbies and Interests), and Dogs (under Pets).

The two-level interest hierarchy is composed of more than 350 categories.

If you want to target more precise sets of users, you can create custom segments by specifying certain @​usernames that are relevant to the product, event or initiative you are looking to promote. Custom segments let you reach users with similar interests to that @​username’s followers; they do not let you specifically target the followers of that @​username. If you’re promoting your indie band’s next tour, you can create a custom audience by adding @​usernames of related bands, thus targeting users with the same taste in music. This new feature will help you reach beyond your followers and users with similar interests, and target the most relevant audience for your campaign.

So, how well does this work? Twitter says it’s seeing not only greater reach, no surprise, but also higher engagement thanks to messages reaching people more likely to be interested. It provides no specifics on these early tests, however.

Twitter also dropped the minimum bid for its auction-based ad system from 50 cents to a penny. That doesn’t mean a flood of cheap ads for getting rid of belly fat are coming. Indeed, it could open up its ads to a broader set of ad buyers, potentially creating more competition and higher prices.

As AllThingsD’s Peter Kafka notes, Twitter isn’t allow advertisers to target ads based on your tweets themselves, which probably makes them less effective in terms of purchase intent than Google’s search ads. Still, the ability to target people by their interests could be a big step forward for the company as it tries to turn its audience into dollars.

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