Contextual targeting needs work.

The first attempts at the long-awaited ad-based revenue model for Twitter were finally sighted. We saw the first glimpses on our Twitter account, while accessing it from an Indian IP address. We’re not sure it’s a global-rollout yet and even these sightings have been stacatto – with the ads appearing and disappearing at random. We were lucky enough to catch a screenshot.

As many pundits guessed, the new ad model is a take on the Google AdWords model with a few changes. First, a little digging at the server side unearthed that these were being served from a machine called “ConTwext” – an obvious take on the idea of “context”. Other IPs we could back-resolve showed “CT1″, “CT2″ and such – these seem to be ad servers that the ConTwexts are being served from.

The ads are even shorter than the 95 character limit (25/35/35) that Google places, and they have no headlines. They use long URLs in contrast to the Twitter standard of shortening URLs.

Here’s our first take.

First, the positives

1. The ads are seamlessly integrated with the Tweets. They don’t stand out like an eye sore. This is a good thing. But how will it affect CTR?

2. There seemed to be a large and diverse inventory of advertisers as virtually every tweet we saw had a ConTwext ad attached to it. They have obviously started getting their ad sales act together.

Then the negatives.

1. The contextual relevance of the ads need a lot of work. We understand some targeting, but others are way, way off the mark.

2. We were unable to see any geo-targeting, which we understand will be a key killer feature. But it could be an early test and we’re awaiting that in the next roll-out.

Have any of you started seeing this yet?