The Future of Twitter Advertising? Just Pay the Kardashians

In 2009, Shaquille O'Neal made history online. His tweet endorsing electrolyte sports strips brand Enlyten marked the first time an athlete had used Twitter to hawk a product.

Five months after Shaq's tweet, a company named Ad.ly started paying celebrities to endorse companies to their hundreds of thousands, or even millions, of followers.

If you think of celebrity Twitter feeds as broadcasts, think of Ad.ly as placing advertisements between the regular scheduled programming. On television, beer and car insurance companies compete for slots during football games. Twitter offers an an opportunity for even more targeting: "Ad.ly tries to match the product with the best fit from its stable of celebrities, though advertisers have the final say as to who promotes their product." Author Ronald Grover writes:

Ad.ly, a 22-person operation run out of a small suite of offices in Los Angeles, is pioneering what it calls the "micro-endorsement." Since its launch in September 2009, it has crafted more than 20,000 endorsements for more than 150 brands, including Sony (SNE), Best Buy (BBY), and Old Navy. The plugs, which adhere to the service's 140-character limit, are delivered through the Twitter streams of the Kardashian sisters, rapper Snoop Dogg, and more than 5,000 other personalities ranging from A-list to D-list.

One of the most effective celebrity promoters is Kim Kardashian, with 5.6 million followers, and sponsor deals with Rebecca BonBon and Nestle. Read the full story at Bloomberg BusinessWeek.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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