Back in May, Twitter started asking for permission to track its users' browsing around the web. It wasn't explicitly stated at the time, but the move was part of the company's effort to build an "interest graph," a map of users' interests based on their browsing, their followers, and what they click on. And all that data is about to be put to use on behalf of advertisers.

Twitter just announced a "big step forward" for its advertising program. Advertisers can now target users on Twitter by their topical interests, a total of 350 categories ranging from "Bollywood" to "personal finance" to "dogs." That's not all: advertisers can also select particularly influential users and cater campaigns to their interests, and by extrapolation, target other users who share those interests. The enhanced targeting is available for Promoted Tweets and Promoted Accounts.

Twitter figures that by serving up more relevant ads, everybody wins

Twitter says that of the users who see an advertising campaign for something like a Bonobos 24-hour sale, one to three percent will engage with the ads in some way. Although the company quoted a much higher rate of three to five percent to Businessweek back in March, that's still a pretty good score for online advertising.

In the past, advertisers have complained that Twitter doesn't offer enough options for isolating the right audience. Interest targeting makes its advertising program much more competitive with Google's and even more so, Facebook's. Facebook has been able to offer advertisers more options for granular targeting because Facebookers volunteer loads of information by filling out their profiles, "liking" pages, recording a history of places lived and worked, and so on.

Interest targeting may seem invasive. But Twitter figures that by serving up more relevant ads, everybody wins. "We've always taken a thoughtful approach to monetization, and early results show interest targeting creates a better experience for marketers and users," writes Kevin Weil, Twitter's director of product for revenue. Twitter awards advertising spots based on a two-part auction: price and engagement rate. "Great content matters: if you have engaging Promoted Tweet copy, you can win even if others bid higher," Weil writes.