The new Twitter links, however, are a whole new story. If an Amazon Associates member takes the time to re-write the text into their own words, there's virtually no way to know by looking at the post that the Twitter update is actually an ad.

Is Amazon Spamming Twitter?

In the past, several legitimate companies have diluted the Twitter stream with promotions and contests encouraging Twitter users to "tweet to win" so to speak, by pasting in some sort of marketing message into the "What are you doing?" box or by appending a promotional hashtag to their everyday messages. But unlike these company-run Twitter promotions, there's not a hashtag to use or any specific wording that has to be tweeted in order to participate in the Amazon Affiliate program. All anyone has to do is tweet links along with the message of their choosing.

Because Amazon's marketplace is extensive in terms of the products it sells, there's a wide variety of things which can be promoted. No matter what a Twitterer's particular interest is: music, politics, technology, etc., there's bound to be hundreds of things that could be mentioned in their Twitter stream without the posts appearing to be an ad. In fact, there's a good possibility that they would have been talking about these products anyway throughout the course of the day...they just couldn't have made any money off of them until now.

Hidden Advertisements

The problem with this sort of "hidden" advertising, though, is exactly that: it's hidden. This is the internet's version of "product placement" - subtle advertising in plain sight yet never clearly identified as such. Was your favorite TV star using a Macbook? Was he drinking a Coke? Already commonplace in Hollywood, these almost subliminal advertising messages permeate our consciousness every time we turn on the TV. Now that same sort of hidden ad will soon show up in the Twitter streams of your favorite tweeters.

Soon they'll start promoting a great book they just read, a DVD they liked, or one of a million other things pulled out of Amazon's vast inventory. None of it will sound out of place given the types of informal conversations that take place on Twitter every day. You won't even know that they're advertising to you until you click through on the link and find yourself on an Amazon.com webpage - and even then, you may not be sure. Was that a referral or were they genuinely just linking to the Amazon website to be helpful?

Will the FTC Step In?

Another question this raises, at least here in the U.S., is whether or not the FTC will get involved. Having recently taken steps to make sure that bloggers were properly disclosing freebies or payments received by companies whose products were being reviewed on their sites, one has to wonder if they'll now be tempted to monitor the undisclosed advertising that's about to explode on Twitter.

Amazon could have avoided the potential threat of government involvement (not to mention the accusations that they're "spamming Twitter") by generating their links using their own proprietary URL-shortening system, something like amzn.com or amz.com for example. That would clearly identify the tweets' purpose. But instead, they opted to make their links with the URL shortener bit.ly, the one that Twitter itself uses by default. This makes the Amazon links indistinguishable at a glance from any other shortened link posted to Twitter. There's no way to tell if a tweet is an ad unless the Twitter user left Amazon's auto-generated text in place. Of course, no one is going to use that text except the laziest of Twitter spammers - people you're probably already avoiding.

Tell Amazon What You Think with #AMZNSOT

Today, many Twitter users are coming out against this new type of Twitter-fueled advertising, registering their complaints via tweets marked with the #AMZNSOT hashtag, the official tag used to give Amazon feedback about the system. These users are already branding this new effort "spam," saying things like: "Amazon now gives you cash for spamming on Twitter? Oh, swell," as Twitter user TwitBin says. "Does this just mean more Twitter spam as people try to make money?" asks NickHerbert. But there are just as many Twitter users saying nice things about the new system too, calling it "cool," "awesome," "sweet," and even claiming it "rocks."

You can give Amazon your two cents as well by updating Twitter with your thoughts and including the #AMZNSOT hashtag along with your message.

Whether you think the new Amazon Twitter integration is good or bad, there's no doubt that it will be a major game changer for Twitter. As it blurs the lines between conversation and ads, people seem to think that Amazon has either created something of genius or has ruined Twitter as we know it. Few seem to be undecided when it comes to their feelings about this issue. The question is now: which side will end up being in the majority?

From an article on AdAge, which reported on Brand in Hand's news in detail, the reason that the women were not engaging with the mobile advertisements came down to how they actually used their phones. The research showed that women, "especially so-called super-moms, are task-oriented and tend to use their smartphones to help them get things done."

In other words, these busy iPhone users didn't have time to goof off by clicking (or rather, tapping) through on a mobile ad. Ads were seen only as distractions that would take them away from the particular task at hand.

For advertisers trying to market to this particular demographic, the new findings will have an impact on what type of mobile campaigns will be run in the future. And given that only 18% of women age 18-49 have a smartphone today, according to Nielsen, smartphone advertisements just won't deliver the numbers that advertisers need. At least for now.

A Better Alternative to Mobile Ads?

Although the AdAge article didn't go into any detail about how marketers could engage smartphone-owning women in different ways, we think that there's at least one company that may have figured it out. Instead of offering distracting mobile banner ads that get in the way of the task that needs to be done, food and beverage giant Kraft introduced their own iPhone app instead.

This branded effort, dubbed "iFood Assistant" (iTunes link), is a recipe app that helps users plan meals. This fits in perfectly with how Brand in Hand claim women use their smartphones - they launch apps designed for a particular purpose. Yet this time, while doing so, the women (and men, too, we suppose) are also engaging with the brand itself because the recipes featured in the iFood Assistant app include Kraft food products of course.

This app is so successful that Kraft is even able to successfully charge for it, something that rarely works for branded apps. But Kraft's app sells - and sells well - priced at 99 cents in the iTunes App Store. They even hit their 3-year download goal in a matter of weeks, said Ed Kaczmarek, Kraft Foods director of innovation. 

While at the moment, Kraft's iPhone application appears to be the exception and not the rule when it comes to creative marketing efforts, it's a great example of how mobile marketing could and perhaps should be done, especially if you want to engage busy, task-oriented women.

Says Microsoft Associate General Counsel Tim Cranton in a recent blog post, "Although we don't yet know the names of the specific individuals behind these acts, we are filing these cases to help uncover the people responsible and prevent them from continuing their exploits."Those involved in the current lawsuit include Soft Solutions, Direct Ad, qiweoqw, ITmeter INC, and ote2008.

In addition to this current civil suit, Microsoft is actively pursuing actions against a number of instant messaging spammers and bot-powered click frauders. It will be interesting to see if the public education campaigns for web security can keep up with the influx of ad delivered trojan horse viruses. The public is directed to the Microsoft Online Safety page for more information.

Photo Credit: Dirk Heuer

The data about how iPhone users discover apps is quite interesting. It doesn't come as a surprise that most users are looking for a specific type of app, but it is also clear that the Top 25 lists in the store play a major role in most users' purchase decisions. 46% of all iPhone users rely on recommendations from friends, while about 20% find new apps through ads in other applications and about 19% base their download decisions on news articles and blog posts they have read.

Given the size of the store at this point, it only makes sense that users rely on popularity as a measure of quality. Sadly, the App Store doesn't allow users to organize apps by ratings. Judging from this data, any app that becomes a bestseller and reaches the Top 25 can probably look forward to a long life within this list.

How Many Apps Do They Use?

About 40% of all iPhone users use about 4 to 6 apps at least once a week. Only about 5% use more than 20 apps per week. Given how many apps most users download per month, these results validate some other reports we have seen which argue that most iPhone apps are disposable and are discarded after a few days of usage.

The Power of Brands

Being an ad company, AdMob also asked the survey respondents if they would download apps from well-known brands. Over 70% answered that they had already downloaded apps from brands and over 60% said that they would be interested in doing so.

As AdMob is more interested in selling ads than revenue from app sales, it makes sense that the company didn't differentiate between paid and free apps in this survey, though it would have been interesting to see more data about how much users pay for their apps on average and what percentage of the apps they downloaded was free.

Methodology

As always, it is important to note the methodology used for this survey. On August 6, AdMob recruited participants through ads in applications that use AdMob's advertising technology. Overall, AdMob received 190 responses from these ads, which the company feels is a significant sample size and provides a representative sample of the larger iPhone app market.

As the Wall Street Journal points out, though, it is also important to note that eMarketer predicted a 10.2% growth in ad spending for 2009 in December 2008. For the upcoming years, eMarketer predicts that the market will rebound and it predicts a 13.2% increase in ad spending in 2010. However, given how far off eMarketer's prediction for 2009 was, we will just take this projection with a grain of salt.

More Bad News for MySpace

Overall, this is obviously even more bad news for MySpace, which is already struggling to just keep its current user base from moving to other services. Even as the MySpace team tries to improve the service and streamline its business, it faces an extremely tough challenger in Facebook, which also has a lot of momentum behind it right now.

These first ads probably aren't going to bring in enough cash to fuel a micro-app acquisition spree by Twitter, but this is the first clear public indication of one way the company is bringing in revenue. It's funny - the ads have been live for about a week now and no one but a few small, alert blogs has written about them. (Seth Simonds in particular caught a really interesting international angle on the story.) It was big news three months ago and we believe it's still important.

Perhaps these sources of revenue will help Twitter remain a viable company long enough for all kinds of questions about this brand new medium to be explored.

Dave Winer argued this Spring that people want to know how Twitter is going to make money because they might not like it. He told a story about learning while in college that Domino's Pizza used profits to fight Planned Parenthood. With all the time, energy and content people are investing in Twitter - many want to know how the company will monetize so they can decide whether it's an organization they want to continue investing in.

And so it has begun. There are ads on Twitter. What do you think?

Disclosure: Federated Media is also the ad network for ReadWriteWeb.

You can find ReadWriteWeb on Twitter, as well as the entire RWW Team: Marshall Kirkpatrick, Bernard Lunn, Alex Iskold, Sarah Perez, Frederic Lardinois, Doug Coleman, Jolie O'Dell, Dana Oshiro , Lidija Davis and Steven Walling.

When a medium has been established for a long time, its ads can become a bit blah! As a Brit who moved to the US, I used to bemoan that TV ads in America were so boring compared to the ones in the UK. Part of the problem was that you could not measure the ROI of creativity. The guys who wrote the big checks could say, "Winning awards, the plaudits of your peers, and a lot of laughs is all very well, but do they drive sales?" The answer, of course, was, "Who the hell knows?"

We have seen the same thing in the Google CPC era, when the whole game was about measurement and analytics. How creative can you get with a text ad?

But when you need to entice users in social media, creativity is so critical. As we heard stories from brands such as Gillette (P&G), American Express, GE, Blackberry, and Intel, a few common themes emerged:

1. Authenticity. You cannot fake it in social media. You will get flamed and exposed, and the campaign will become counter-productive.
2. Risk-taking. You have to take a chance on a campaign. The old tried and true corporate-approved stuff will just bomb.
3. Strategy. You have to have a clear strategy. What problem are you solving, and what big lever are you using to hit that goal?

The Gillette India Story

There were so many great stories, but this one resonated the most. Imagine selling razor blades in a country with a billion plus people and where your blades cost ten times those of the local competition. Gillette's sales had been flat for a decade. After this one particular campaign, its sales grew by 40%. That is massive. The thing to note is that it spent a lot of money on traditional media but used that to spark a debate (about the value of shaving for your sex appeal and career prospects) that was amplified in social media.

Feeling Like the Web 1.0 of 1995

Big money is starting to move into social media. There is recognition that the old ways of selling online -- what some people are calling "tradigital" -- is not working as well anymore. But it is still very experimental. The numbers don't reflect it yet. But many smart and creative people are working out new ways to engage consumers. Some of the resulting campaigns will be dismal, embarrassing failures: this is a high-risk game. But doing nothing would be worse and would leave room for smart competitors to steal market share.

How to Play This If You Are a Web Tech Venture

The overriding message to people who sell tech solutions or websites to advertisers and marketers was that there is no silver bullet. This is the era of the "mashup campaign," using a lot of tools and informed by an overarching strategy. So, if you sell one of those tools, make sure you play nicely in the eco-system. Be a good mixer: open APIs and the rest of it.

Interestingly, with regards to ads in SMS messages, the numbers were pretty close (22.5% vs. 17.6%). This seems to be an area where the iPhone doesn't outshine other phones.

Of course, with the impending release of the Palm Pre and the large number of Android phones in the handset makers' pipeline, it will be interesting to see if these numbers will look similar on phones that are able to offer comparably compelling experiences (though, at least in the beginning, without the tens of thousands of apps that iPhone users have access to). It would be nice to see numbers that compare recall rates just for users of smartphones, like the iPhone or Blackberries. But for mobile advertisers, these are encouraging numbers, especially given that more and more users are drifting away from feature phones and towards smartphones like the iPhone.

SocialMedia.com has raised millions of dollars in financing and says it's seen excellent results in previous campaigns on Facebook and other social networks. Now it's going to bring its strategy to Twitter, dedicated microsites and elsewhere around the web. The strategy is essentially to track, highlight and prompt casual conversations online about an advertiser's product. Do you want to be part of those kinds of conversations?

Now the company is going to roll out a service that tracks Twitter mentions of a company, product or keyword. The discovered search results will be filterable, can be limited to a particular group of users, and can then be displayed in a widget or microsite. For an additional fee SocialMedia will purchase ads in popular Twitter clients that prompt users to Tweet about an advertiser. Twitter users don't get paid for doing so, they just get the opportunity to offer public feedback, perhaps with a common hashtag so all the related tweets can be viewed publicly with ease. We can imagine people going for that. RSS readers can click here to participate in a poll on this topic and view the results.

Other new products being rolled out today include branded embeddable polls and activity stream publishing microsites that will function a little like Twitter but will stand alone on an advertiser's site.

"I came here to talk about my thoughts, feelings and experiences with friends and a global network of diverse people - and you want me to write about your product?"

About 75% of Super Rewards' income is currently derived from advertising offers, while the other 25% come from direct sales of in-game points that bypass the advertising solution. Super Rewards has about 40 million users worldwide, a majority of which can be found in English-speaking countries. Super Rewards currently features about 3,000 different offers in its database.

Developers can now implement the Super Rewards system relatively easily into their own games and apps. For relatively simple applications, this can be as easy as copying and pasting Super Rewards code into their own programs. While Bailey couldn't quite divulge all the details in the agreements that the company has signed with developers, he stressed that Super Rewards would take less than the 30% cut that Apple currently gets from apps sold in the App Store.

Walking a Fine Line

Overall, this looks like an interesting solution for developers to monetize their games and social network apps, though they will clearly have to walk a fine line between creating a compelling reason for users to engage with advertisers, and looking like they are exploiting their users and annoying them with ads and offers from Super Rewards. Some of the games are obviously also targeted at younger kids, which could potentially introduce a number of ethical problems for developers who want to implement Super Rewards in their apps.

AdMob will allocate ad impressions based on the quantity and quality of the inventory that each member contributes.

Given that developers have relatively few outlets to promote their applications outside of Apple's App Store, this looks like a good way for developers to get the word about their applications out to users. Given that the ads appear in other apps, the targeted users are obviously already interested in downloading iPhone apps.

The post informed advertisers that they now had access to two of the most frequently requested targeting filters: language targeting and location targeting. Obviously, the language targeting makes sense, especially considering that Facebook is currently available in 40 languages with over 60 more in development. In fact, it's somewhat surprising that this feature was not available until now.

When a particular language is entered into a box on the ad signup form, the approximate reach of the selection will appear at the bottom. For example, if an advertiser enters in a location of "United States" and the language "Spanish," the approximate reach will display 1,081,820 - the number of Spanish-speaking Facebook users in the States.

Facebook Knows Where You Live

However, it's the location-based targeting which is the most interesting of the two updates. Here, advertisers can narrow their focus in order to target users within a certain mile radius of a particular location. This feature is currently available only in the U.S., the U.K., and Canada for targeting cities and/or targeting within 10, 25, or 50 miles of the cities selected.

With this feature, advertisers can tap into the detailed demographics that Facebook users so willingly share along with their age, sex, relationship status, educational background, etc. (You didn't really think you were just filling that info out to share with friends, did you?)

Will Hyperlocal Ads Come Next?

As advertisers better learn to target narrower sets of users, we wonder if it's only a matter of time before Facebook introduces a mobile, location-based component to their network which would allow users share their exact (or nearly exact) location within a city. Imagine the possibilities for extreme hyperlocal ads then! What if advertisers could target all the users who updated how they were sipping lattes at Starbucks, for instance? Or perhaps the ads could target users who posted that they've checked in at a Vegas hotel for a big conference? These are the sorts of niche demographics that advertisers can only dream about now, but the technology already exists to enable that level of precision.

Today, a handful of early-adopters are currently sharing this type of information through Facebook's News Feed and status updates courtesy of the mobile social networking service Brightkite. If you're friends with any Brightkite users, you'll likely see the location updates pop into your feeds from time to time thanks to that service's ability to integrate with Facebook by way of Facebook Connect. This relatively new authentication technology allows users to log into the Brightkite service with their Facebook account and then shoot their updates from Brightkite back into their profiles. If Facebook advertisers could tap into the sort of niche demographics that Brightkite could give access to, it could open up a whole world of possibilities for hyperlocal ad targeting.

The only stumbling block to implementing this type of targeting is the same one that always comes up: those pesky users and their sense of privacy. Would Facebook users revolt if, all of a sudden, Facebook knew exactly where they were and served up ads that did too? The Facebook ads seem creepy enough now as they're often far more accurate and relevant than some users are comfortable with. What would hyperlocal ads look like then? Far creepier, we would imagine. "Do you really need that second Frappuccino? Why not head to the gym instead - it's only 3 blocks away!" Yikes.

But while it's true that some users would balk at that level of invasiveness, others would welcome it. In fact, Facebook is actively cultivating a sense among its users that going online is no longer a private activity. By tucking away their privacy controls deep within their settings, they're encouraging the average user to overshare personal information with people who would have never known them in that way before - people like mom, dad, and the boss, for example.

In time, the sense of openness Facebook fosters among a person's social - and perhaps professional - network will wear away at that sense of privacy until users aren't just tolerant of these hyperlocal ads, they will welcome them and they'll expect them. Google's recent foray into more targeted advertising will only help further this cause, too.

Of course, in this imagined scenario, Facebook users who want to maintain their privacy would be able to do so - they could just opt-out of the feature. But maintaining online privacy is something that will, over time, become harder and harder to do. There will be more settings to adjust, more configuring of block lists, and more checkboxes to mark. Most users won't bother with it - they will just adjust to the changes and to the new reality of the smarter (and yes, perhaps scarier) ads.

In order to keep track of your activities, Google will set a persistent cookie on your system, though the company goes out of its way to say that it is doing so in the most transparent way possible and is giving users the option to control their settings. Google also made a plugin for all the major browsers available that makes sure that Google will continue to respect your opt-out decision even after you delete the cookie. Yahoo, it should be noted, also offers users a similar option to opt out of its customized ads.

Behavioral Advertising

Most importantly, though, this represents a major shift in Google's advertising strategy, especially because it now also features behavioral advertising, which will target ads to you based on sites you visited previously.

Both privacy advocates and government representatives have long been suspicious of the privacy implications of behavioral ads. Just last month, the U.S. Federal Trade Commission released a report (PDF) with a number of recommendations for how the industry could self-regulate itself, but for some, these measures don't go far enough to ensure that users' privacy rights are respected.

Overall, Google seems to go beyond the FTC's recommendations to ensure its customers' privacy - and they are definitely not the first company to implement behavioral advertising - but given the size and scope of the personal information that Google already stores, we can't help but feel slightly queasy about this.

Only about half of all respondents between 18 and 24 thought that websites were likely to collect non-personally identifiable information, and only a third of 18 to 24 year olds thought that websites were likely to collect personally identifiable data.

70% of older respondent over 55, on the other hand, thought that websites tracked non-personally identifiably information. The study did not find a major differences between how men and women responded to this question.

Exchanging Privacy for Targeted Ads

Burst Media also looked at people's sentiments about targeted advertising. Only about 23% of all users were willing to give up non-personally identifiable information in return for ads that were better targeted at them. Women (26.7%) were clearly more concerned about this than men (19.9%), and older respondents were more likely to disapprove of websites collecting non-identifiable information in return for more relevant ads.

Internet users regularly push back against behavioral advertising, be it Facebook's Beacon, Phorm's deep packet inspection, or the constant undercurrent of concerns about all the personal data that Google now stores in its data centers. Tim Berners-Lee, the 'father of the Internet,' expressed his concerns over this in an interview with the BBC last year. Talking about his data and web history, he said: "It's mine - you can't have it. If you want to use it for something, then you have to negotiate with me." A lot of users clearly share this sentiment, though far too many younger users still seem to be quite unconcerned about it.

We tried to install the Gaze code on our own websites, but it didn't pick up on any keywords yet. This is no surprise though, given that the beta only supports two content types right now: celebrities and travel.

We were able to try out the back-end of Gaze, however. The site allows content producers to heavily customize the user experience. You can, for example, choose whether the popup box is activated when users hover over it, or only once they actually click on the link. You can also change the color of the popup box, and manipulate when and where the popups appear.

When Snap's popups first appeared in 2007, they were generally considered to be highly annoying and many users argued that they ruined the reading experience. Since then, Snap has toned things down a bit, but Gaze looks like a throwback to the old Snap experience. Other companies, like Panels.net, are trying to implement similar ideas. There are definitely situations where these popup boxes can be quite helpful - stock quotes, for example - but most readers never really warmed up to the idea of popup info boxes.