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New Twitter Tools, Game Changer for Businesses?

Twitter is getting serious about helping businesses deliver ads as it builds its own business.

Source: Twitter.com

Twitter just announced new tools for brands to target ads — “Promoted Tweets” and “Promoted Accounts” — at users based on their interests.

The idea is that connecting marketers with people with relevant interests, will be a win-win: the messages will be more relevant so users will click on them more, yielding a higher return-on-investment for advertisers.

Another piece of news: Twitter is lowering the minimum bid from fifty cents to just 1 cent for all its auctions. This should encourage even more companies to test out Twitter ads. And because Twitter determines the winners of its auctions based not only on the price people are willing to pay, but also how engaging their tweets are, advertisers with popular content could end up paying less to reach more people, which would again boost their return on investment.

Twitter’s new targeting will identify users based on their interests — the company is introducing more than 350 interest categories, from education, to investing, to soccer. And brands can dig deep into a particular area by targeting not just movie lovers, but people who are big fans of say horror films, or romantic cmomedies. A fashion brand could reach out to someone who just started following wedding bloggers. A car brand that’s sponsoring the Super Bowl could reach out to people interested in cars and the NFL. And, brands can send very different promoted tweets to each niche demographic they’re tarteting. (Read More:Brands Don't Pay for Facebook's Most Powerful Ads - Report.)

Source: Twitter

Until now advertisers could only target their followers, or users who looked like their followers, so this is a big step towards allowing advertisers to make the most of Twitter’s data to reach a broader group of potential customers.

Twitter won’t reveal exact details, but the company tells me that it’s been beta testing this new system with its partners and “the results have been phenomenal.” (Read More: Do Consumers Click on Mobile Ads?)

Twitter has said that its "Promoted Tweets" have a 1-3 percent average engagement rate —that’s compared to a tenth of one-percent engagement rate for web display ads. We’ll see how these more targeted ads boost Twitter’s stats.

This news comes just a day after Twitter announced another tool to help business — “Twitter Certified Products.” Twitter has identified 12 independent developers that can help its advertisers or brands that use Twitter to do everything from analytics, to better engaging with customers, to sifting through data.

Twitter is giving these dozen companies its stamp of approval, a way of indicating that it won’t cut off access to its firehouse of data. This all seems to be part of a larger push to help brands make the most of its platform.

-By CNBC's Julia Boorstin
@JBoorstin

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.