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At long last, interactive TV advertising has arrived with Twitter’s latest product

For decades the television industry has dreamed about the Holy Grail of interactive advertising: commercials that enable viewers to pick up their remotes to get a coupon, book a test drive or enter a contest. While there have been many successful experiments so far, none of them has scaled. As we wrote two months ago, Twitter was poised to crack the code. And today, it looks like they did just that.

Twitter has just announced a new advertising product, powered by recent acquisition Bluefin Labs, that enables an advertiser to target Promoted Tweets to viewers who have watched its ads on TV. It doesn’t happen instantaneously — think of it as an interactive extension of the commercial that lives on Twitter for hours or days to come.

Here’s how it works: if you’ve tweeted about a particular show while it was on the air, Twitter concludes that you’ve watched it. Twitter then looks at which commercials aired in the show, drawing a connection to the spots you’ve seen.

“TV ad targeting works by using video fingerprinting technology to automatically detect when and where a brand’s commercials are running on TV, without requiring that advertiser to do any manual tracking or upload media plan detail,” explains Twitter’s Michael Fleischman, who helped build the product. “Whenever a commercial airs during a TV show, Twitter not only determines where and when it ran, but can identify users on Twitter who tweeted about the program where the ad aired during that program.”

Twitter is rolling out a “TV Ads Dashboard” (below) that enables TV advertisers to track when their spots have aired. “This will help digital teams align not only with what’s shown on TV and when, but give insight into how Promoted Tweets can be crafted in the most effective ways to build upon broader marketing themes,” explained Fleishman.

And several days ago, Twitter rolled out a “Lead Generation Card,” which amplifies its TV ad product. Through a single click, a Twitter user can share her email address with an advertiser to, say, get a coupon, book a test drive or ask to enter a contest.

Then later this year, Nielsen will debut the Twitter rating, which will give a true sense of reach by measuring how many people actually saw Tweets related to a TV show or brand. So far, that impression data has been locked in Twitter’s analytics vault, but it will provide a much-needed metric — tied to ratings — that helps TV producers, programmers, marketers and advertisers justify their Twitter investments.

Some may be growing weary of TV hashtags, but the success of Twitter’s new ad product hinges on its ability to continue to illustrate to its TV partners that there’s real ratings value in stoking social conversations. On the sales side, Twitter will undoubtedly enable TV networks to bundle these Promoted Tweets with their larger ad packages, to ensure they have a financial stake in this emerging interactive TV business.

It’s been fascinating to watch this come together: the emergence of the second screen alongside an explosion in social media has enabled Twitter to grasp an unusual opportunity. “64 percent of mobile centric users on Twitter use it in front of the TV at home,” Fleishman explains. “Twitter lets brands continue the conversations they start with their TV advertising by building on the awareness they generate through TV with the interactivity and engagement of Twitter’s social/mobile DNA.”

The new product is launching in beta for Twitter’s existing advertisers.

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