For most people, it’s probably no big surprise that Twitter have been ‘secretly’ trying out an advertising platform that they can fully integrate with their micro-blogging service; so what are they hoping to achieve from this self-service advertising platform?
The aim is to be able to generate enough revenue to make sure that the company is able to keep itself sustained, and, according to Adam Bain (Twitter’s Chief Revenue Officer), they have given a small number of businesses the opportunity, over the past few weeks, to test out this self-service system of showing ads.
The theory behind this idea would seem to be: if Facebook can use self-service ads to create around 60% of its $3.8 billion of revenue this year, why wouldn’t a company with as many users as Twitter try to follow that sort of successful advertising model? It’s also the model that Google used to become one of the biggest advertisers around, so there is definitely potential in it.
I strongly believe that this form of advertising is going to be popular with small to medium sized businesses too just like Facebook advertising has become an integral part in marketing campaigns for hundreds and thousands of companies. The reason why this should prove popular is the fact that you don’t have to talk with a sales person – although 100 new staff have been employed by twitter specifically – and the ads can be purchased using a credit card. Considering how the internet is a 24 hour, worldwide platform that’s full of small and medium-sized businesses, this sort of flexibility is becoming a must.
To emphasize just how this new platform could increase the revenue of Twitter, it is expected that the amount of money will grow from the $45 million taken in the US in 2010, to somewhere in the region of $399.5 million by the end of 2013. Twitter has increased the number of advertisers that they have from six (18 months ago) to over 2,400 now; it’s this sort of growth that helps to back up the projected figures they have for the end of 2013.
The new “promoted” tweets are also said to be getting 100 times more interaction from consumers than the older style of online advertising. An example of this increase in effectiveness is the promotion via Twitter of the movie “Super 8″. By giving fans details on where they could see early screenings of the movie, it is thought that the movie generated an extra 15 to 18 million dollars at the box office on the opening weekend.
With the vast reach that Twitter has, this advertising platform could well see their revenue start to reach its potential, and with over 100 million people using it each month, 50 million of which log on daily, to send more than 250 million tweets each day, there is a lot of potential for it to live up to.
To get to the point where 60% of its ad revenue is made up by self-service ads, may take a number of years, but doing it in a slow and methodical way can be far more of a positive than it is a negative; as it could help them to find ways to block the fraudulent advertisers and spammers, that have caused problems for many of the other companies that have seen rapid increases in growth.