Twitter left a lot unanswered with new ad strategy, but Wall Street didn’t mind

Twitter left a lot of questions unanswered about its new syndicated ad network, but it looks like Wall Street didn’t mind. The social company’s stock closed up six percent after it announced it would start powering promoted tweets on other sites. The tweets would look a lot like they do in Twitter.

A mockup of a promoted tweet that could appear outside Twitter

A mockup of a promoted tweet that could appear outside Twitter

It’s sort of a confusing premise, one that led Re/Code to call it a “concept” rather than a “full-blown product.” Would promoted tweets appear on the sidebars of websites? Would they pop up embedded in posts? Would they only show up in widgets that serve up a bunch of tweets? Twitter’s blog post on the news didn’t elaborate further, aside from saying they’d appear on Twitter’s first partners: Flipboard and eventually Yahoo Japan.

Flipboard is an obvious integration, since tweets are already part of the content. Flipping past a promoted tweet as you go through stories would feel natural. “Because Flipboard already integrates organic Tweets into the app, the Promoted Tweet will have the same look and feel that is native to the Flipboard experience,” the Twitter post said.

I was struggling to think of many other examples where there are streams of tweets on other websites. Most media companies embed or show one-off tweets, so a promoted tweet there would look jarring and might keep journalists in particular from embedding tweets. A few years ago, embedded widgets showing latest tweets by certain users were very popular, but I haven’t seen those in awhile. I asked Twitter for more examples of where they imagine these promoted tweets appearing, and I’ll update this if I hear back.

On the surface, Yahoo Japan is a weirder partner choice than Flipboard. Why would Twitter want to work with an Asian arm of a struggling media brand?

Turns out, Yahoo Japan is its own separate entity — the American Yahoo helped found it in conjunction with telecommunications company SoftBank. Yahoo Japan’s popularity has continued to soar even as Yahoo’s has plummeted. And Twitter is hugely popular in Japan as well. It’s an easy way to test the product before courting other companies.

A source familiar with the Twitter’s strategy told me they’re still developing this new promoted tweet strategy and will be releasing more information in the future. The person I spoke with said that we can expect to see promoted tweets both in feeds of tweets from the website, but also as standalone units. “The promoted tweet is a trusted and known unit and it looks and feel really easily digestible,” they said. “You need users to say, ‘This is content I’m ok with having here.'”

That’s key for Twitter’s new external ad strategy to succeed. Given the fact that the company is serving up promoted tweets, not newly designed ads, it has to hope people like that format.

Twitter will reportedly unveil its own app development platform

The Information is reporting that [company] Twitter [/company] will introduce its own app development platform — called Twitter Fabric — at its developer conference October 22. Through the service, app developers will apparently be able to verify user logins based on phone numbers, run analytics to test their apps and earn ad money through Twitter’s MoPub network. In exchange, Twitter will be able to gather crucial information for ad targeting and grow the app supply side of its MoPub user base. Twitter is supposedly in talks with ESPN and Target, among others, for early partnerships.

Today in Social

I bent over backwards to avoid putting the term “mobile ad network” in the headline, because Facebook is saying very little about what it is actually testing. It tells TechCrunch and confirmed to AdExchanger that it is testing selling IAB-format ads through exchanges who buy inventory from mobile ad networks. It may or may not be working directly with mobile networks also. It is anonymizing its user data, but using that for targeting – presumably for batches of similar users rather than anything 1:1. (1:1 targeting doesn’t scale cost-effectively for almost anything other than high-end financial services and medical products.) Neither will Facebook say which advertisers it is working with, though it sounds like it’s flogging mobile apps. Facebook has done some ad targeting on Zynga, and it is hungry for app discovery services it can sell to third-party app developers, who are some of its biggest web advertisers. We all expect a Facebook ad network some day, though it would be easier to build a Like-based one for the web before going mobile.

Today in Social

Search was the quarter’s bright spot – well, relatively speaking – for Microsoft’s online business. But one wonders if two of Microsoft’s biggest search partners see things that way. Microsoft’s Facebook ad partnership has always been more about potential than actual money. At one point, I thought Microsoft might build an ad network for Facebook, something that looks like an extreme longshot these days as Microsoft writes down aQuantive and Facebook tests its own search-related ads. At the same time, Danny Sullivan takes a historical look at how the Yahoo-Microsoft search partnership has never really paid off for either company. He thinks that if it comes to renegotiating the deal, Microsoft will do what it takes to hold on to Yahoo. I suspect he’s right. But that still doesn’t solve the issue of closing Microsoft’s search revenue gap with Google.

Priorities for Yahoo’s new CEO

Last week Yahoo announced it had hired Scott Thompson, currently the president of eBay’s PayPal business, as its new CEO. Thompson has product and technology cred, which means Yahoo should be fixable. With that in mind, here’s what he should do to get Yahoo growing again in order to retain its position as one of the biggest players in online advertising.