by Laurie Sullivan

Twitter unveiled a service Tuesday that lets companies tweet sponsored search ads. The announcement represents the first in several planned features the company will introduce during the coming year. The first phase, beginning today, maps out a multiphase release for advertising on the site.

The tool, Promoted Tweets, relies on tweets available in Twitter’s organic search results, which means those appearing in a person’s Twitter stream, but Twitter co-founder Biz Stone promises the ads won’t be intrusive. The technology behind the platform will trigger sponsored tweets at specific times to followers of the brand, explains Stone in a blog post.

People will begin to see Tweets promoted by advertisers at the top of some Twitter.com search results pages. It’s not clear, however, whether the platform would provide advertisers with reports, or how keyword bidding would work.

“It’s likely Twitter will set up an auction system similar to the one used for keywords on Google,” says Forrester Research Analyst Josh Bernoff. “In fact, it would shock me if they didn’t, because these ads will become more successful if they’re not sold to individual companies like a media company does.”

Twitter’s first advertisers — Starbucks, Bravo and Virgin America — have been using the platform to promote products long before Promoted Tweets became available.>

Bernoff says that obviously, click-through rates (CTRs) will depend on the message in the ad. A click-through to a coupon for a free cup of coffee will likely yield higher results than a blast promoting a product. “Any sort of hard-sale push will likely fail,” he says. “It might even generate backlash. The message must fit into the conversational nature of Twitter.”

Before rolling out additional phases to the one-year platform during the coming year, Stone says the company wants to gain a better understanding of the effect Promoted Tweets will have on people using Twitter and the advertisers trying to reach them.

Insight into the long-awaited platform first emerged during the IAB Annual Leadership meeting 2010 in Carlsbad, Calif. in February. Anamitra Banerji, who heads product management and monetization at Twitter, told attendees when Twitter launches an ad platform, it will become “explicitly clear that a sponsor” paid for the ad, and make it “relevant and useful, so the user doesn’t think of it as an ad.”

Twitter on Friday announced the acquisition of iPhone client and third-party application Tweetie from Atebits. Developers still have the ability to tap into Twitter iPhone and iPad applications to create tools and integrations for people who use the service. Some third-party developers began to voice opinions on whether any new applications would compete directly with their own.

But it appears that third-party developers and Twitter co-founders Stone and Evan Williams have competition, as the company attempts to find a business model that generates sustainable revenue. The competition opens business models, not only for advertisers, but ordinary people, musicians, artists, or small business owners who believe they have something important to say.

Paid search on Google or Bing might have some competition for ad dollars, too. On Monday, Idealab founder Bill Gross unveiled TweetUp, a search tool that lets people bid on keywords to move up tweets in search results. The platform combines a bid-based marketplace with algorithm-based triggers that consider the popularity, relevance and influence of tweets and tweeters.

TweetUp Chief Marketing Officer Steve Chadima says the ability to bid on keywords to push up tweets will allow people to swim through the clutter and find the important information. “People are brands in Twitter and they want followers,” he says. “You want thoughtful followers — people committed to you and what you have to say.”

Chadima says TweetUp will generate revenue through a standard impression-based advertising model. The minimum bid is 1 cent, but he says the market will bid up the keywords to its own discretion. “There are some keywords in the ad and the traditional Internet search model that are quite expensive, but if you look at those keywords they represent words like Web-hosting services,” he says.

Source: MediaPost Online Media Daily – Twitter Unveils Paid Advertising Platform, Finally, Avoids ‘Hard-Sale Push’