Twitter investors have long been waiting for the time when the micro-blogging site will make money from people who are not using its services. And it appears the wait came to an end on Thursday when the company announced that even its logged-out audience will be able to see ads.
Finally delivering what it has been talking about
There are around 500 million people who visit Twitter on a monthly basis but do not have active user accounts. Now if a person clicks on a tweet that appears in a Google search, then he or she will be able to see the ads on that tweet page or on the profile of the tweet creator.
For the past few months, the company has been arguing continuously that its audience is not limited to the 320 million users who log in each month but rather that it is way bigger than that. The micro-blogging firm has long been telling Wall Street that it has the ability to make money from people who do not have Twitter accounts, and now it is finally doing that.However, it is yet a mystery as to how much money those ads will generate from visitors without an account.
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Twitter has always assured advertisers of relevant targeting: “We know who you are because we see what you tweet, who you follow and what kinds of things you engage with.”
Facebook too has the same pitch, but that does not translate to people who are not logged in.
Massive win for Twitter
Such a change is big for Twitter for several reasons. First, it holds importance for advertisers are attracted to Facebook because of the higher number of registered users on it. Second, it holds importance for Wall Street for similar reasons.
Adam Bain, Twitter’s COO and revenue boss, believes that these new ads that Twitter plans to run in its core “promoted Tweet” format still have the potential to generate significant revenue. In October, during the earnings call, Bain said the monetization from these ads will be about half the rate of usual Twitter ads.
This news sent the company’s shares up by 7% in early trading on Thursday. The stock eventually closed up 6.71% at $25.94.