Over the last year, newspapers have successfully utilized the micro-blogging social networking site, Twitter, to distribute their content and build up their audience.

However, newspapers have not started cashing in directly from the tweets published on Twitter - at least not yet. As Ad Age reports, early exploration from New York to Montreal is showing how newspaper publishers could cash in on their 140 character tweets.
Even though Los Angeles-based paid-tweet purveyor, Ad.ly, has started inserting paid tweets from advertisers among news tweets from publishers, some major newspapers, such as The New York Times are not ready to try paid tweets, despite having nearly 2.3 million followers on Twitter.

Senior VP-chief advertising officer at The New York Times Media Group, Denise Warren, told Ad Age that they are taking a "wait-and-see" approach on paid tweets, making sure "audiences really understand the difference between the paid tweet and the real tweet."

Instead, the American daily started selling packages of ads that appear specifically for visitors who arrive through social media, such as Twitter or Facebook, offering advertisers the opportunity to buy certain shares of such readers, typically around 25%. Although Warren insisted that it is too early to tell if this effort has worked, she did emphasize that marketers have begun to accept these kinds of tools.

Canoe, a major Canadian news publisher based in Montreal, is testing yet another alternative to capitalize on the traffic arriving through Twitter and other social media. Since last month, the newspaper has used a service from Assetize, a Toronto-based company that aims to monetize user-generated content, which inserts an advertising bar on top of pages that get shouted out in participating Twitter feeds.

This gives the news publishers room for branding and for an ad message, along with buttons encouraging retweets and ad sales. So far, the Canadian company has been using the advertising bar to promote itself, but ads from third-party marketers might be coming soon.

Some critics argue that paid tweets are an interruption and that they only alienate followers. However, Ad.ly CEO, Sean Rad, believes tweets are media like any other, perfectly able to carry on advertising as long as it is relevant and used with restraint. Ad.ly, which connects participating "Twitterers" with advertisers, has so far been successful at attracting mostly celebrities with large numbers of followers on Twitter, doling out up to $10,000 for a tweet.

In addition to advertising through paid tweets on publishers' Twitter feeds, Ad.ly plans to introduce an algorithm this month that will tie pricing for paid tweets with the quality of each feed, considering factors such as retweets and how much advertising the feed runs to minimize spam and ensure the quality of the stream.

Despite innovative efforts to unlock Twitter's financial potential, no large news publishers have signed on as risks of isolating followers and spamming remain high. However, as Twitter retains its predominance on the social networking scene - it received over 58.4 million visitors in September of 2009 - it is likely that more efforts to monetize tweets will spring up this year.