The ads which appear in the Twitter Inc (NYSE:TWTR) news feed, allow users to click in order to go directly to Apple Inc. (NASDAQ:AAPL)’s App Store or Google Inc (NASDAQ:GOOGL)’s Play Store based on their preferred mobile OS.
Twitter is hoping that it can bring in more ad money by utilizing these ads. Advertising accounts for nearly all of Twitter’s revenues and in the first quarter totaled just over $250 million for the first quarter which was double the corresponding quarter the year prior. While those numbers may be impressive, Twitter has yet to make a profit in its over eight year history.
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Twitter following Facebook’s lead
Twitter users have already been subjected to these ads, now they will just see more as the company feels the time is now given Facebook Inc (NASDAQ:FB)’s success with them.
Mobile-app install apps have been powering Facebook’s mobile ad business which now accounts for 59% of its total revenue according to its first quarter numbers. Just last year, Facebook’s mobile ad revenue only represented 30% of total revenues in the first quarter. Facebook has been offering mobile-app install ads since 2012 and provides very well received app install suggestions based on the wealth of information that Facebook has to offer advertisers who target users based on age, past downloads, location and other factors.
Whether Twitter Inc (NYSE:TWTR) can prove to advertisers that it can provide just as accurate targeting as Facebook remains to be seen. The data that Twitter will offer advertisers will be more keyword and interest oriented and the ads will be served through MoPub, the company’s advertising exchange that Twitter claims can reach over one billion devices worldwide.
Presently Twitter offers three advertising products that are more text based but the company has been trying to change this with its “card” technology that is essentially an expandable tweet that allows advertisers more choice in the media that they can use.
Beta test success and lower costs for advertisers
The beta test of the new product we’re quite successful according to one participant, Mladen Raickovic, a general manager at AdParlor, a social-media advertising manager whose clients participated in the program. He believes that his clients have been able to bring the cost of acquiring a new customer below the $5 mark that makes it about the same price as Facebook Inc (NASDAQ:FB).
With this roll-out, Twitter will only make money if someone clicks there way to one of the aforementioned app stores.
“We wanted to make it as efficient as possible so advertisers are not paying for clicks they don’t care about,” said Kelton Lynn, a product manager at Twitter.