How Twitter will enter into the programmatic ad business remains a mystery to many. During the past few months, rumors have swirled over some sort of Twitter ad exchange to be launched. How that will happen is unclear.
Nevertheless, various strategic directions seem possible as Twitter tries to siphon growing programmatic media ad spend. The answer may lie somewhere between cookies and hashtags. Here are a few ideas for the Twitter executive team to ponder...
The Hashtag Exchange
No doubt Twitter would like to offer something all-new in the programmatic media business. How about "The Hashtag Exchange?" This could leverage the real-time aspects of Twitter's platform as well as the user's penchant for adding hashtags to their microblog posts.
How it could work: Much like targeting overlays created in mobile advertising, where cookies are being replaced by latitude and longitude coordinates or device ID signals, Twitter (think Google-owned and -operated sites), the Twitter Ad Network (think Google AdSense - see below) and other hashtag-minded publishers could offer inventory to the exchange and allow users to be targeted by either the hashtag keyword or a taxonomy that maps to hashtags. The Hashtag Exchange might bring to life those trillions of tags appended to posts and articles across the Web.
The exchange could be contextual or behavioral, targeting web pages with certain hashtags or certain taxonomies (privacy-friendly). Or, with cookies, the exchange could target users who created those hashtags or come in contact with those taxonomies and are tracked/targeted across the Web.
Creative-wise, the exchange could be text- or image-based. Considering "native" momentum and Twitter's bread and butter, maybe text is best in this case. Is this a "native ads" exchange?
Retargeting on Twitter
Whether it's Twitter.com, Tweetdeck or some other Twitter carrier pigeon, Twitter ad placements could be bought by retargeters seeking connection with their bottom-of-the-funnel consumer target.
What's hard to imagine with this scenario is retargeters' ability to outbid Twitter's own ad serving system, which targets the limited scale of Twitter ad inventory today. Only last year, the AdExchanger marketing team was targeting users through Twitter's self-service tool and paying between $0.50 and $7.50 a click. It was not cheap, but for well-defined, vertical audiences, the click plus the impression in Twitter clients such as Tweetdeck seemed to provide the desired share of voice we were seeking. Could a shoe retargeter outbid the Cost Per Click (CPC) being paid courtesy of Twitter's own buying toolkit, and back it out to the retargeter's desired Cost Per Action (CPA)? It seems unlikely. Moreover, retargeting ads might meet resistance from consumers, but that certainly hasn't stopped Facebook.
The Twitter Ad Network
All those little Twitter buttons on blog post pages – such as the one at the top of this page – offer Twitter the opportunity to set a cookie and target a user, depending if the button is served by Twitter or clicked by the user in order to tweet. Like Google's AdSense, Twitter could offer ad code that publishers would put in their favorite 728x90 banner ad slot, for example. When a buyer of the ad network sees a user it wants according to Twitter's audience data – and perhaps its own – it could buy accordingly.
Twitter "Custom Audiences"
Taking a page from Facebook's "Custom Audiences" product (and Aol and Yahoo from the decade prior), Twitter could offer email list owners such as ecommerce publishers the opportunity to match their email lists against Twitter's email database of users. For any match it finds, Twitter could offer targeting of those users, either on Twitter properties or clients, or on the Twitter ad network previously described.
Similar to the "Custom Audiences" idea, Twitter could stay out of the media business but offer advertisers and their agents the ability to sync their online and offline data with Twitter's database of users who are constantly updating their Twitter cookies as they surf the Web and run into the aforementioned Twitter buttons on their favorite websites and blogs. The cookie sync business could keep client cookies "fresh" and provide Twitter some stealthy cash.
The Hashtag API
Clearly, hashtag targeting is something that the Twitter sales team is already selling direct as well as through its self-serve platform for Twitter inventory. Yet a Twitter Hashtag API could inform buying algorithms – and selling algorithms for that matter – which target placements on the Web, mobile or otherwise.
I'm sure there are other ideas. Feel free to add yours below.