Twitter Looks To Facebook Model For Increased Ad Revenue

It seems like only yesterday (2010), when Facebook Inc (NASDAQ:FB) introduced its targeted ads platform that changed the advertising world. That introduction boosted Facebook’s ad sales to nearly $2 billion in 2010, and over $3 billion in 2011. Presently, analysts, despite other revenue streams, estimate that advertising makes up over 60% of Facebook’s total revenue.

Twitter Looks To Facebook Model For Increased Ad Revenue

It was for this reason that Facebook Inc (NASDAQ:FB) was valued around $50 billion in early 2012 and forced investors to question whether or not it was worth that much. Well, as it stands, even after a dismal IPO and stagnant “recovery”, Facebook Inc (NASDAQ:FB) has a market capitalization of nearly $68 billion. So, yes it is.

It’s with this in mind that Twitter has followed the Facebook Inc (NASDAQ:FB) model, as they hope to receive the same type of ad growth with their new API or “application-programming interface.”

From the Twitter Advertising Blog (Don’t bother counting characters, it’s from their blog and only an excerpt at that, well over 140)….

“As interest in Twitter has grown, our focus has been on delivering better ads for users, not more ads. We believe our system is working well because users like the ads experience on Twitter. Our system rewards marketers for being good, not for being loud. And this approach encourages ads that are engaging, relevant and useful.”

I’m not sure all 200 million plus Twitter users would agree that they like the “ads experience” on Twitter, but It’s not terribly intrusive by any means. Over time I may even be able to mentally block them out as I have with Facebook.
Most people don’t even notice the sprinkling of ads they receive presently, and this is not expected to change overnight.
Research firm eMarketer estimates Twitter revenues could grow by up to 90 per cent this year to $545.2m, and reach more than $800m in ad revenues worldwide by 2014, according to the Financial Times. Not a shabby way to approach a Street expected IPO sometime in the same year.

“Our cus­tomers have been ask­ing us to include Twit­ter” in Adobe’s media products, said David Karn­st­edt, senior vice-pres­i­dent of media and adver­tis­ing solu­tions at Adobe. “Pro­moted Tweets and Pro­moted Accounts are impor­tant assets in cre­at­ing a holis­tic dig­i­tal mar­ket­ing cam­paign.”

While I honestly have no idea what a “holistic” digital marketing campaign,” is… I’m certain these remarks came following Adobe’s testing of Twitter’s new API with their client Levi Strauss. More importantly, and this must be the holistic part, through a regional segmenting of the campaign, fiddling with bid levels on pricing, and granular targeting, Adobe was able to increase Levi’s followers by more than 60%.

While this 60% growth may prove an aberration, companies big and small will undoubtedly benefit from the automated nature of this advertising API as Twitter counts their money.