Okay, the headline’s an overstatement—but not by much. Microblogging platform Twitter has recently taken action against a promotional idea that went over really well with its current users, to judge by the metrics—but that might, if allowed to propagate, put a major hurt onTwitter’s ability to attract a growing audience, or to monetize those users once they get them.

The promotion in question relied on “hashtags”, those phrases that follow “#” in tweets and that are used to identify a thread, so that users can search for and sort the jumble of disjointed 140-character conversations that can swirl around a topic on Twitter.

On June 30, Website-building tech company Moonfruit ran a Twitter promotion to get some viral buzz centered on its 10th anniversary. All users had to do was to send a Twitter containing the hashtag “#Moonfruit in it to get a chance to win one of 10 Macbook laptops being given away, one a day for ten days. Each Twitter containing the hashtag got you another chance to iwn the dialy random drawing, with no limit on entries; and you had to re-enter for each days’ drawing.

The results put UK-based Moonfruit at the top of the Twitter Trends list that account holders see on their home page. That’s amazing, since it happened in a week that saw dramatic election violence in Iran and the Michael Jackson memorial. Moonfruit built its Twitter followers from 444 to 44,113 in the course of the 7 days (according to the company’s blog, Moonfruit Lounge . At one point 300 tweets per minute–1.63% of all Twitter traffic—contained the “#moonfruit” tag.

But the promotion was cut short on the seventh day, and the plug was basically pulled by Twitter, according to Moonfruit marketing director Wendy Tan.

As she explains in a blog post , last Friday the microblogging platform apparently pulled Moonfruit off that trends list that users see, even though third-party metrics firms were still seeing the #moonfruit tags coming.

Suppressing the tag from the trend list, which as the home page says shows Twitter users “what’s happening—right now” under a search box that lets them look for topics, was about the most the service could do to dampen the viral spread of the conversation without censoring the actual #moonfruit tweets.

It may not seem like much, but it was enough to lead Moonfruit to end the contest early.

Twitter has not given an explanation for the move, but comments around the contest suggest that users were getting many, many #moonfruit tweets from the people they followed—and multiple tweets each day, remember, often multiple tweets in a bunch and often re-tweeted or passed along by other followers—and at least some of them weren’t pleased by being used by the folks they follow on Twitter to win a contest.

“User-generated spam,” one blogger called it.

“Getting spammed three messages at a time by half of my users is a painful thing to sit through,” wrote another , “because I’d rather not block or unfollow these people. They are still worth following, and it is this good will that I and others extend to the people we follow that companies capitalize on whenever they do these awful contests… Twitter has only people who refuse to play such games to help prevent it from being a wasteland of useless hashtag promotions and nothing more.”

That’s not a choice you want to force any portion of your audience to make when your medium is so new, as Twitter is, that you haven’t even finished gathering a critical mass of users, much less figured out how you’re going to monetize them.

Gaming the Twitter hashtag trend tracker (or marketing smart and for free using hashtags, depending on your perspective) is not new. Last month employees for high-end furniture maker Habitat were caught appending messages about the company’s “totally desirable Spring collection” to hashtags about the Iranian election, for which Twitter coverage was sometimes the most reliable source of news unfiltered by state media. This is called “hashtag hijacking”. The company apologized and stopped after Twitter users raised an outcry.

Also in June, Squarespace, another Website builder, ran a campaign that offered users the chance to win 30 iPhones I 30 days by including the hashtag #squarespace with their tweets. The difference was that the Squarespace campaign only counted one hashtag entry per day rather than encouraging players to send as many as they could to maximize their chances of winning.

(Aside about the madness of crowds: Does it occur to people that contests that let players send in as many entries as they want drastically lower an individual’s odds of winning? Probably not, or Powerball lotteries would never exist.)

Moonfruit, via Tan and the company blog, maintain that they’re mostly disappointed by the high-handed way Twitter simply suppressed them from the trends list without explanation. “We didn’t expect the campaign to become so large,” Tan wrote. “And believe it or not, we didn’t want to dominate Twitter for 10 days, or push important subjects like Iran off the agenda… We also recognize that the campaign sets a dangerous precedent and could have implications for how Twitter is used and abused by marketers.”

“If Twitter had come to us and said, ‘Guys enough is enough,’ then we would have worked with them to limit the campaign, or complied with whatever they were demanding,” she added. “However, if they have pulled the trending without explanation or communication, this sets rather a different tone…It’s certainly their right to protect their network and technology investment. (And incidentally, I think taking us off the trends at this point is the right thing for Twitter, and I’m happy with that response.) But as a company that strives to provide a real-time democratic communication platform, we don’t believe taking action quietly behind the scenes is the right answer, not exactly transparent.”

It’s a good point, and Twitter is at fault for not speaking up about their reasons for taking action against the #moonfruit campaign up to this moment. Kudos to Moonfruit too for being gracious enough to admit that this campaign, like so many others in viral marketing, got away from them and grew beyond all expectations.

Still, a couple of points should be made. First, Twitter has the right to edit the hashtags that appear in its trends alert for reasons ranging from avoiding smut to damping down spam. It’s a consumer communication tool, not a publicity machine. Other social media from Google PageRank to Digg don’t simply let the algorithms do the counting and post the results; they monitor those machine-made results, albeit with other machines, and are on the lookout for individuals (or marketers) trying to game their systems and make it onto the Digg front page or higher than they should be in Google results.

Second, social communities have an inherent etiquette, and the Moonfruit hashtag promotion violated Twitter’s by encouraging unlimited tweeting. In these environments, attention is a commodity; I invest my time in following other users because I’ve decided it’s worth my while. If I find that growing numbers of the message I get through Twitter are either spam or someone else’s attempts to win free stuff… well, I’ve got better to do with my time. Granted, it’s the users who perpetuate campaigns that could kill off a channel such as Twitter; but that doesn’t mean Moonfruit and other marketers shouldn’t be prevented from handing out guns at the door.

Etiquette also involves a decent respect for minority wishes. The Web site Social Bug did a back-of-the-envelope calculation based on comments appended to articles about the Moonfruit promotion and estimated that those comments were running about 82% positive. Combine consumers’ love of free stuff and marketers’ respect for a next-to-free promotion that posted big numbers, and that sounds about right. But that doesn’t make it right for Twitter. Google doesn’t stay on top of the search pyramid by offering only 18% of its users a lousy experience.

And marketers may want to think before opting to go with the majority vote, too. Do you really want to risk pissing off 18% of a channel’s users just to run a giveaway campaign? And what is that campaign buying you, really? Giveaways work out in the offline world too, but they’re not known for producing loyal, long-term customers.

“There are always going to be marketers who push the envelope, and this was a pretty harmless example,” Sarah Hofstetter, vice president of emerging media and client strategy for digital agency 360i, said in an e-mail. “There’s always a greater risk when it dilutes the user experience, and Twitter Search and hashtags are important parts of the experience. The marketer here doesn’t deserve the blame, though most established brands shouldn’t risk the backlash of gaming the service.”

For the un-established Moonfruit brand, however, the promotion was apparently an unalloyed success, producing a 600% jump in traffic to the Moonfruit.com Web site and a 350% spike in sign-ups for service trials.

In other words, as sure as ten dimes buy a dollar, some other advertiser is planning the next hashtag campaign. And the folks at Twitter may have to lay out and then publicize the boundaries of what kind of on-platform marketing is permissible a lot sooner than they expected.

What do you think? Are hashtag campaigns on Twitter an effective viral marketing tool that Twitter should stop fighting? Or are over-eager marketers going to spam this platform into the next e-mail?

Okay, the headline’s an overstatement—but not by much. Microblogging platform Twitter has recently taken action against a promotional idea that went over really well with its current users, to judge by the metrics—but that might, if allowed to propagate, put a major hurt onTwitter’s ability to attract a growing audience, or to monetize those users once they get them.

The promotion in question relied on “hashtags”, those phrases that follow “#” in tweets and that are used to identify a thread, so that users can search for and sort the jumble of disjointed 140-character conversations that can swirl around a topic on Twitter.

On June 30, Website-building tech company Moonfruit ran a Twitter promotion to get some viral buzz centered on its 10th anniversary. All users had to do was to send a Twitter containing the hashtag “#Moonfruit in it to get a chance to win one of 10 Macbook laptops being given away, one a day for ten days. Each Twitter containing the hashtag got you another chance to iwn the dialy random drawing, with no limit on entries; and you had to re-enter for each days’ drawing.

The results put UK-based Moonfruit at the top of the Twitter Trends list that account holders see on their home page. That’s amazing, since it happened in a week that saw dramatic election violence in Iran and the Michael Jackson memorial. Moonfruit built its Twitter followers from 444 to 44,113 in the course of the 7 days (according to the company’s blog, Moonfruit Lounge . At one point 300 tweets per minute–1.63% of all Twitter traffic—contained the “#moonfruit” tag.

But the promotion was cut short on the seventh day, and the plug was basically pulled by Twitter, according to Moonfruit marketing director Wendy Tan.

As she explains in a blog post , last Friday the microblogging platform apparently pulled Moonfruit off that trends list that users see, even though third-party metrics firms were still seeing the #moonfruit tags coming.

Suppressing the tag from the trend list, which as the home page says shows Twitter users “what’s happening—right now” under a search box that lets them look for topics, was about the most the service could do to dampen the viral spread of the conversation without censoring the actual #moonfruit tweets.

It may not seem like much, but it was enough to lead Moonfruit to end the contest early.

Twitter has not given an explanation for the move, but comments around the contest suggest that users were getting many, many #moonfruit tweets from the people they followed—and multiple tweets each day, remember, often multiple tweets in a bunch and often re-tweeted or passed along by other followers—and at least some of them weren’t pleased by being used by the folks they follow on Twitter to win a contest.

“User-generated spam,” one blogger called it.

“Getting spammed three messages at a time by half of my users is a painful thing to sit through,” wrote another , “because I’d rather not block or unfollow these people. They are still worth following, and it is this good will that I and others extend to the people we follow that companies capitalize on whenever they do these awful contests… Twitter has only people who refuse to play such games to help prevent it from being a wasteland of useless hashtag promotions and nothing more.”

That’s not a choice you want to force any portion of your audience to make when your medium is so new, as Twitter is, that you haven’t even finished gathering a critical mass of users, much less figured out how you’re going to monetize them.

Gaming the Twitter hashtag trend tracker (or marketing smart and for free using hashtags, depending on your perspective) is not new. Last month employees for high-end furniture maker Habitat were caught appending messages about the company’s “totally desirable Spring collection” to hashtags about the Iranian election, for which Twitter coverage was sometimes the most reliable source of news unfiltered by state media. This is called “hashtag hijacking”. The company apologized and stopped after Twitter users raised an outcry.

Also in June, Squarespace, another Website builder, ran a campaign that offered users the chance to win 30 iPhones I 30 days by including the hashtag #squarespace with their tweets. The difference was that the Squarespace campaign only counted one hashtag entry per day rather than encouraging players to send as many as they could to maximize their chances of winning.

(Aside about the madness of crowds: Does it occur to people that contests that let players send in as many entries as they want drastically lower an individual’s odds of winning? Probably not, or Powerball lotteries would never exist.)

Moonfruit, via Tan and the company blog, maintain that they’re mostly disappointed by the high-handed way Twitter simply suppressed them from the trends list without explanation. “We didn’t expect the campaign to become so large,” Tan wrote. “And believe it or not, we didn’t want to dominate Twitter for 10 days, or push important subjects like Iran off the agenda… We also recognize that the campaign sets a dangerous precedent and could have implications for how Twitter is used and abused by marketers.”

“If Twitter had come to us and said, ‘Guys enough is enough,’ then we would have worked with them to limit the campaign, or complied with whatever they were demanding,” she added. “However, if they have pulled the trending without explanation or communication, this sets rather a different tone…It’s certainly their right to protect their network and technology investment. (And incidentally, I think taking us off the trends at this point is the right thing for Twitter, and I’m happy with that response.) But as a company that strives to provide a real-time democratic communication platform, we don’t believe taking action quietly behind the scenes is the right answer, not exactly transparent.”

It’s a good point, and Twitter is at fault for not speaking up about their reasons for taking action against the #moonfruit campaign up to this moment. Kudos to Moonfruit too for being gracious enough to admit that this campaign, like so many others in viral marketing, got away from them and grew beyond all expectations.

Still, a couple of points should be made. First, Twitter has the right to edit the hashtags that appear in its trends alert for reasons ranging from avoiding smut to damping down spam. It’s a consumer communication tool, not a publicity machine. Other social media from Google PageRank to Digg don’t simply let the algorithms do the counting and post the results; they monitor those machine-made results, albeit with other machines, and are on the lookout for individuals (or marketers) trying to game their systems and make it onto the Digg front page or higher than they should be in Google results.

Second, social communities have an inherent etiquette, and the Moonfruit hashtag promotion violated Twitter’s by encouraging unlimited tweeting. In these environments, attention is a commodity; I invest my time in following other users because I’ve decided it’s worth my while. If I find that growing numbers of the message I get through Twitter are either spam or someone else’s attempts to win free stuff… well, I’ve got better to do with my time. Granted, it’s the users who perpetuate campaigns that could kill off a channel such as Twitter; but that doesn’t mean Moonfruit and other marketers shouldn’t be prevented from handing out guns at the door.

Etiquette also involves a decent respect for minority wishes. The Web site Social Bug did a back-of-the-envelope calculation based on comments appended to articles about the Moonfruit promotion and estimated that those comments were running about 82% positive. Combine consumers’ love of free stuff and marketers’ respect for a next-to-free promotion that posted big numbers, and that sounds about right. But that doesn’t make it right for Twitter. Google doesn’t stay on top of the search pyramid by offering only 18% of its users a lousy experience.

And marketers may want to think before opting to go with the majority vote, too. Do you really want to risk pissing off 18% of a channel’s users just to run a giveaway campaign? And what is that campaign buying you, really? Giveaways work out in the offline world too, but they’re not known for producing loyal, long-term customers.

“There are always going to be marketers who push the envelope, and this was a pretty harmless example,” Sarah Hofstetter, vice president of emerging media and client strategy for digital agency 360i, said in an e-mail. “There’s always a greater risk when it dilutes the user experience, and Twitter Search and hashtags are important parts of the experience. The marketer here doesn’t deserve the blame, though most established brands shouldn’t risk the backlash of gaming the service.”

For the un-established Moonfruit brand, however, the promotion was apparently an unalloyed success, producing a 600% jump in traffic to the Moonfruit.com Web site and a 350% spike in sign-ups for service trials.

In other words, as sure as ten dimes buy a dollar, some other advertiser is planning the next hashtag campaign. And the folks at Twitter may have to lay out and then publicize the boundaries of what kind of on-platform marketing is permissible a lot sooner than they expected.

What do you think? Are hashtag campaigns on Twitter an effective viral marketing tool that Twitter should stop fighting? Or are over-eager marketers going to spam this platform into the next e-mail?