Twitter To Prohibit Any Third Party To Advertise In-Stream

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Twitter just put up a blog post talking up its platform approach and long-term strategy. In that same post, however, the company has made some decisions that are sure to irk a couple of third-party developers and startups.

Here’s the big news: aside from (its own) Promoted Tweets, Twitter says it will not be allowing any third party to inject paid tweets into a timeline on any service that leverages the Twitter API. The changes will be reflected in an updated set of Terms & Conditions, which is due to be released ‘shortly’.

Update: here it is (details below)

This is not so good news for Twitter-focused advertising startups like Ad.ly and Twad.ly (and others). It also definitely perked the ears of TweetUp, who had just launched its live beta at TechCrunch Disrupt.

You can see their initial reaction to the news below.

Here are the reasons Twitter says it decided not to allow third-parties to advertise in the stream:

First, third party ad networks are not necessarily looking to preserve the unique user experience Twitter has created. They may optimize for either market share or short-term revenue at the expense of the long-term health of the Twitter platform. For example, a third party ad network may seek to maximize ad impressions and click through rates even if it leads to a net decrease in Twitter use due to user dissatisfaction.

Secondly, the basis for building a lasting advertising network that benefits users should be innovation, not near-term monetization. Twitter is uniquely dependent on and responsible for the long-term health and value of the platform. Accordingly, a necessary focus of Promoted Tweets is to explore ways to create value for our users. Third party ad networks may be optimized for near-term monetization at the expense of innovating or creating the best user experience. We believe it is our responsibility to encourage creative product development and to curb practices that compromise innovation.

It is important to keep in mind that Twitter bears all the costs of maintaining the network, protecting the Tweet stream against spam, supporting user requests, and scaling the service. Indeed, Twitter will bear many of the support costs associated with any third-party paid Tweets, as Twitter receives support emails related to anything a user sees in a tweet stream. The third-party bears few of these costs by comparison.

Twitter adds that when its new Annotations feature launches, there are going to be many new business opportunities on the Twitter platform in addition to those currently available. The three guiding principles the company touts it abides by are:

1) no control or ownership over what users tweet

2) other companies have enough opportunities to sell ads, build vertical apps, offer analytics, etc. aside from injecting paid tweets into the stream. Twitter explicitly says it’s perfectly fine with display ads and other mobile advertisements around the timelines of Twitter clients.

3) the company says it doesn’t always need to participate in the ways in which other companies monetize the network

The company does recognize that for a few companies, the new Terms of Service prohibit activities in which some have invested resources. It will be interesting to see how those companies will respond to the news.

TweetUp CEO Bill Gross, for one, says they never planned to advertise in-stream anyway, so this won’t affect them as much as you would think – and we thought – at first.

Nevertheless, it shows that certain decisions Twitter makes along the way as it moves forward with its platform and how to monetize it most efficiently should keep startups that base their entire business model on the Twitter platform on high alert.

Update: here is the relevant part in the updated T&C:

IV. COMMERCIAL USE

It is our goal to provide you, our ecosystem partner, with a policy that is clear and transparent about what you can do to monetize your Service. This is best summed up in two principles:

respect user content — Tweets may be used in advertisements, not as advertisements.
respect user experience — build your service around the timeline, not in the timeline.

And now, for the details:

1. Twitter Ads.

Twitter reserves the right to serve advertising via its APIs (“Twitter Ads”). If you decide to serve Twitter Ads once we start delivering them, we will share a portion of advertising revenue with you per our then-current terms and conditions.

2. Advertising Around Twitter Content

(a) We encourage you to create advertising opportunities around Twitter content that are compliant with these Rules. In cases where Twitter content is the basis (in whole or in part) of the advertising sale, we require you to compensate us (recoupable against any fees payable to Twitter for data licensing). For example, you may sell sponsorships or branding around gadgets or iframes that include Tweets and other customized visualizations of Twitter. Please contact us for questions and information at twitter_ads@twitter.com, or to notify us of an advertising opportunity.

(b) You may generally advertise around and on applications or sites that display Tweets, but you may not place any advertisements within the Twitter timeline on your Service other than Twitter Ads.

(c) Your advertisements cannot resemble or reasonably be confused by users as a Tweet.

(d) You may advertise in close proximity to the Twitter timeline (e.g., banner ads above or below timeline), but there must be a clear separation between Twitter content and your advertisements.

3. Using Twitter Content. You must get permission from the user that created the Tweet if You:

o want to use their Tweet on a commercial durable good or product (for example, using a Tweet on a t-shirt or a poster or making a book based on someone’s Tweets); or

o create an advertisement that implies the sponsorship or endorsement on behalf of the user.

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