Twitter has formally launched its self-service ad platform for small businesses, which it announced earlier this year as its answer to Google’s AdWords. It massively expands the number of advertisers using Twitter from an estimated 3,000 to tens of thousands.

While Twitter’s ad business is unlikely to match Google’s service in terms of use it is a major step into allowing businesses to harness the power of 140 character ads via Promoted Tweets and Promoted Accounts.

The interesting question is going to be how popular will this be? How will small businesses take to it? And wow cost effective will it prove? Last year we heard that Twitter was telling advertisers that followers were worth $2.50.

Part of its success will hinge on whether advertisers find it as cheap and easy to use as Facebook’s self service ad platform, which has been a real success for Facebook and its advertisers.

What we do know is that there are many great examples of small businesses using Twitter really well — Mark Shaw wrote last year that “Twitter is a game changer for small busienss”.

Twitter itself highlighted some of those stories last year. One of those was about Broadway Books in Portland Oregon. The small 20 year old bookstore was facing possible closure back in 2008 in the run up to the Christmas period, but a single tweet by the bookstore owner’s son, @everydaydude, saved the day.

He blogged about his mom’s bookstore closing and said he had $1,000 credit left on his card and would personally buy everyone who bought a book from his mother’s store a burrito out of his own pocket.

Twitter has produced a promotional video (below), but here are the highlights from Twitter’s announcement:

* Get started in minutes: we provide ongoing management of your advertising.

* No previous advertising experience is required. If you can tweet, you can advertise on Twitter.

* Gain new followers: Promoted Accounts helps your small business connect with new people who want to hear from you and can spread the word about your business to others.

* Amplify your Tweets: Promoted Tweets helps your small business get your messages in front of more of the right people. Twitter will take out the guesswork by automatically identifying and promoting your most engaging Tweets.

* Pay per follower for Promoted Accounts and per engagement (click, retweet, reply, and favorite) for Promoted Tweets.

* Target the whole world, specific countries, or limit your reach to specific U.S. metropolitan areas.