Twitter expected to double ad revenue in new deal

Twitter expected to double ad revenue in new deal

By Michael Somerville - 10:47AM - Fri 5th July 2013

Social networking site Twitter is planning to allow advertisers to use their own customer databases to show “promoted tweet” ads to people who have already shown an interest in their products or services.

The site will follow Facebook and Google into the retargeting business and maintains that users will see better adverts on Twitter, not more.

Twitter is expected to generate $582m in advertising revenues this year, almost double last year’s figure, according to analyst group eMarketer, and rising to almost $1bn in 2014.

The scheme will be tested out in the US and will boost Twitter’s advertising rates without having to increase the number of ads it shows to a user.

The changes to the database will change the company’s privacy policy but will offer “simple and meaningful” ways to opt out of the scheme.

Twitter first introduced ads targeted to users’ assumed and published interests, based on who they follow or what they tweet about, last August.

Its new targeting technology works by allowing advertisers to upload batches of website cookies or email addresses to Twitter’s ad platform which is shared in an encrypted format to ensure privacy. The information is then used to match with the email address that a user entered when they signed up for Twitter.

Coupon or discounts could now be used to target customers who have signed up for a business’s newsletter, purchased products or visited its website.

Retargeting can improve an advertiser’s return on investment because ads are aimed at those who are already more likely to purchase from that advertiser.

“Twitter needed to be smart in the way that it advertised to users” said Simon Robinson, Senior Director Marketing & Alliances EMEA, Responsys. “One problem with unsophisticated retargeting is that customers can be shown ads for products they have already bought, which can be irritating for users and does not add value for marketers.”

Twitter’s approach was praised by online rights group Electronic Frontier Foundation, which said its moves were “typical of the direction that major online companies are moving.”

Adi Mamdar of EFF said in a blog post on Wednesday, “We think Twitter is setting an important example for the internet. It is possible to exist in an ecosystem of tailored advertisements and online tracking while also giving users an easy and meaningful opt-out choice. This is in stark contrast to many other advertising and tracking firms. We encourage more companies to follow their lead.”

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