Twitter Inc Set To Establish Strong Foothold In Mobile Ad Space

Twitter Inc (NYSE:TWTR) has rolled out its mobile app install ads. Baird analysts Colin Sebastian and Benjamin C. Gaither said that it provides further clarity on the company’s mobile monetization strategy. Baird has a Neutral rating on the stock with $50 price target, reflecting about 19% upside potential. The analysts believe that Twitter is still in early innings of monetization.

App install ads give Twitter an incremental revenue opportunity

Baird believes launch of the app install ads is an important step for Twitter to establish a stronger foothold in the mobile advertising space. Mobile ad market is still in its infancy, but is expanding rapidly. Facebook Inc (NASDAQ:FB)’s mobile monetization has been driven primarily by app install ads. Twitter’s move also provides it incremental revenue opportunity.

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The microblogging company aims to capitalize on marketers’ demand for better engagement and targeting. Its app install suite provides targeting, engagement and measurement features throughout MoPub network. That makes it the second major platform after Facebook to roll out an explicit app install product. Twitter’s offering gives advertisers enhanced targeting capabilities across platforms (iOS, Android) and devices (smartphones, tablets), besides the demographic segmentation feature.

Twitter has increased price transparency

Twitter Inc (NYSE:TWTR) has partnered with many mobile measurement firms, and adopted the CPC-based pricing structure to improve price transparency. Marketers will pay only when a user downloads their app or accesses previously downloaded app directly through the link shown in Twitter’s news feed. Initial feedback on the app install ads have been positive. Advertisers that participated in early testing have expressed enthusiasm about its mobile targeting capabilities.

However, Twitter is late to the party. Many advertisers are using other platforms such as Facebook for audience re-targeting. But Twitter’s real-time “broadcast” format gives it some unique advantages. As a result, the company can position itself as a formidable force in mobile advertising market. We have seen with Facebook that advertisers have been slow to adopt new ad formats and understand its ROI.

Twitter Inc (NYSE:TWTR) shares inched up 0.38% to $42.21 at 1:01 PM EDT on Wednesday.