Twitter increases price of Promoted Trends to $200,000 before IPO

Companies, get ready to shell out a lot more to have your hashtag appear as a Promoted Trend. Twitter has hiked the price for the category to $20,000 a day in anticipation of the company going public soon.

The asking rate for Promoted Trends on Twitter has seen a steady rise since its addition to the website in 2010. The $200,000 price tag is a whopping 150 percent higher than the $80,000 it cost three years ago. Last year, the micro-blogging site demanded a cool $150,000 for Promoted Trends – a 33 percent increase in a year, showing just what an impressive revenue generator it is.

What the Promoted Trend essentially does is place a specific hashtag or message at the top of the ‘trends’ list on the Twitter home page and apps. This tool makes sure visibility of the hashtag is on an all-time high, giving the exposure a brand or product needs. The trend, of course, is marked as ‘promoted’, helping users classify between what trends are user generated and what is promoted.

Minting money with hashtags

Twitter currently runs only one Trend at a time, and almost never runs two Promoted Trends a day. The site sometimes doesn’t run any on some days. According to Twitter’s support website, “Promoted Trends are visible to all users on Twitter.com while they are being promoted.”  Compare this to Facebook that charges nominal rates for advertisements and runs a host of them daily, targeting them specifically based on gender, territory and age and it may look like Twitter isn’t really well off selling Trends. But the fact remains that if Twitter can manage to sell one slot of Promoted Trends a day, the company would generate $73 million per year.

Promoting Trends, accounts and tweets is the closest Twitter can get to running ads on the website without disrupting the line of thought of users on the site. While Facebook has enough space to experiment with multiple advertisements placed on various parts of the website, Twitter’s user interface does not allow for it. But that does not mean Twitter’s promoted ads have been a blank shot.

The idea has been a hit from the word go. Some of the companies that use (and can afford) these Trends are JetBlue, Virgin, HBO and Samsung. While Promoted Trends have a fixed price, the promoted accounts and promoted tweets are sold through a more convenient auction system.

Promoted Trends had started to sell in 2010 almost a little later than the promoted tweets, which CEO Dick Costolo has described as the company’s ‘atomic unit’ of its ad strategy.

Twitter is all set for its IPO as early as next year and has been forging its way ahead with going public in mind. Twitter recently acquired Bluefin Labs, a social TV analytics company, which the company hopes to use while trying to work an intersection between Twitter and TV.

Twitter also introduced a new language for the website called LOLCats in an attempt to woo its user base. The language is reminiscent of the phonetic meme language used along with cat pictures that is quite a craze around the interwebs.