Evan Williams: Huge Demand for Twitter Ads

Evan Williams says this is just the beginning for ads on Twitter.

I caught up with the CEO of Twitter from the annual Advertising Week conferencein Manhattan; he tells us demand for Twitter's ads is far outpacing the company's supply.

Williams says that not only are more companies looking to advertise on Twitter, but each company also wants to spend more on ads.

What about the brands like Best Buy who experimented with Twitter but haven't renewed their deals? Williams says he expects companies like Best Buy to come back — they're still in experimental mode.

Now that Twitter is starting to talk about their ads' impact, that may help shift advertisers from short-term experiments to longer-term commitments. Today Twitter revealed that the "interaction rate" with its promoted Tweet ads (a retweet, new follower or click-through) is 5 percent. In contrast standard web display ads have a 1 percent click-through rate.

What about the fact that companies can communicate directly with consumers through paid accounts, without spending a dime on advertising? Williams says that it comes with the territory that companies will interact with consumers for free. But he says that their ad products amplify the free experience by what he calls a "vast magnitude."

Bottom line:Williams says all companies will have a free presence on Twitter but the ones that want to use the medium to really break through will pay. The more data Twitter can crunch on ads' impact, the more advertisers will want to spend.

But is this enough for Twitter to compete with Facebook and Google for ad dollars?

Williams wouldn't dwell on the competition, saying they're trying to create something "entirely new."

As Twitter rolls out more ads, a key question is: can it deliver messages without more debilitating outages? Williams acknowledges that no one likes it when tech glitches bring the site down, but that's not even advertisers' biggest concern. Still, he says the company is investing in infrastructure and manpower to make sure Twitter's systems are stronger to support their expansion.

For more on Twitter's outages and growth strategy check out my full interview with Williams.