Ad.ly, the startup known for serving up ads in Twitter streams, is launching an ad network for third-party developers to allow clients to serve ads to users within their applications.
Ad.ly now allows developers to access a new API to serve contextually and locally targeted ads to app users based on the streams they’re reading and where they’re located. For example, Ad.ly will allow developers who create clients to serve Facebook, Twitter, MySpace and LinkedIn updates to serve an ad for a local LA restaurant to a user who lives in LA or has been Tweeting about LA. While it’s a good idea, the startup could soon find themselves cut off at the source, as other real-time networks follow in Twitter’s path.
A few weeks ago, Twitter COO Dick Costolo announced a strict policy on developers serving in-stream ads within the Twitter stream timeline that is leveraging Twitter’s API. The updated Twitter TOS was thought to ban in-stream ads and affect in-stream ad networks like Ad.ly. Though Twitter is the only real-time content provider with such restrictions, it wouldn’t surprise me if others follow- especially as providers look for internal methods to monetize their content.
Still, Ad.ly has always said that their business model doesn’t effect Twitter’s new TOS because the ads are not technically served within the stream or timeline, though it could all change very quickly. Be that as it may, Ad.ly is still going strong, and developers will likely flock to its new in-app ads for content streams. The company’s founders call it “AdSense for the stream,” and it basically works by using the content of the stream to return one or more targeted in-stream ads, which the app can then stylize and display adjacent to the given stream. Ads are served on top of a stream, not within the stream, and advertisers themselves can sign up to serve ads on third party apps through Ad.ly’s self-service platform.
I’ve been following Ad.ly since the beginning, and knew they were treading delicately with their business model. Whether they can find a happy medium with Twitter and others who may follow is still up for discussion, but for now, it remains a pretty good idea, and one that will surely flourish with developers.