Ah, Twitter…. The 140-character micro-blogging platform that is sitting comfortably as the third-most-used social network (of course, Facebook is at number one). Roughly 165 million people use Twitter to send out short messages, blast tips and links to followers, and build their social capital. Twitter’s co-founder even made the bold (yet mostly unsubstantiated) prediction the other day that the site would hit a billion users sometime in the future. Now, Twitter is preparing to launch a self-serve small business ad product, but before you sign on as an advertiser, you might wonder: despite the large number of users, do those users actually pay attention to what’s tweeted?

First, the few details we have about Twitter ads: Mashable reports that Twitter has been testing a variety of ad formats for big-brand advertisers like Best Buy and Starbucks. The “Promoted Tweet” format used since April has been fairly successful for them, with a short list of major advertisers reportedly paying six figures for the service that places their tweets at the top of some Twitter search pages (the founders even claim that people WANT to receive Promoted Tweets, as evidenced by the fact that Starbucks now has more than a million followers). The “Promoted Account” is another, more recently released advertising format that has seemed to work well for them on a local, more subtle level.

The new, self-service model for small businesses, which is slated to be available next year, would include targeting that allows local businesses to deliver their ads based on location and based on what tweets people already follow. For example, a restaurant in New York would have clues about which Twitter users follow restaurants in New York City, and that restaurant could then target ads to those users.

None of this is particularly surprising… Social networks with a wealth of users often try many routes to monetize their platforms. What sets Twitter apart, however, is its growth and adaptability. Right now, Twitter has apps on most of the big mobile platforms, which will come in particularly handy for location-based ads. And those ads can be syndicated to third-party apps, as well. In short, there will be almost no Twitter users who can avoid seeing ads on the network. That level of guaranteed eyeballs is huge.

All that visibility makes the potential for the small business advertising product pretty substantial. Finally, Twitter will be able to scale its advertising, making it an option for everyone from the big chain store to the little local business on the corner. The company, in turn, will be able to see its business model expand into something more like the powerhouses of Facebook and Google. Mashable seems to think that bringing Twitter ads to small businesses will be a major step for Twitter, and they’re probably right.

That said, there’s a flipside to all these glowing reports: Wired published an article the other day noting that a recent study done by a social media analytics company suggested that 71% of all tweets on Twitter are ignored. The study looked at 1.2 billion tweets sent during August and September, and the researchers found that seven out of ten tweets got zero response from the users of the network. Six percent of the tweets they looked at were retweeted, and 23 percent were replied to, but in both cases, the retweets and replies happened almost entirely within the first hour of the initial tweet.

Simply put, if your tweet isn’t replied to or retweeted within the first hour, it’s not doing anything to stimulate the conversation, research suggests.

I have a small problem with this study, though. Many tweets on Twitter include links to other stories, articles, quizzes or websites of note. I myself send out tweets that include links to news that I think my followers will find interesting. Nothing was said in this study about the number of Twitter link click-throughs; rather, for the purposes of this study, only replies and retweets constituted a “reaction.” But if users are clicking on the links in the tweets they receive, then those tweets are getting a reaction, as well. It may not be the sort of reaction that “sparks a conversation” or inspires users to send the same tweet to others, but it does what the tweet is trying to do: spread the word about a particular bit of information. In those cases, a click on the link may be exactly the reaction desired by the person sending out the tweet.

So when it comes to Twitter, I wouldn’t go so far as to say that 71% of tweets are ignored. Rather, they can serve different purposes, some of which don’t merit a reply or a retweet. And since that’s the case, I have some hope for the new small business ad product Twitter will be launching in the coming months. As millions of new users continue to sign up for Twitter and people continue to follow the things that matter most to them (and search for more things that they care about), I think there’s a lot of potential for small, local businesses to benefit from self-serve ad options in the network.

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