Twitter Inc And Omnicom Group Reach $230 Million Deal

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Twitter Inc (NYSE:TWTR) purchase MoPub last September for a reported $350 million. MoPub automates buying and selling mobile ads, part of a movement in the digital ad industry towards “programmatic advertising,” or the computerized buying and selling. The purchase by Twitter was believed made in order to ramp up revenues prior to Twitter’s highly anticipated initial public offering.

Twitter’s Deal

With the deal today, Twitter Inc (NYSE:TWTR) locked in ad rates and inventory access for Omnicom Group Inc. (NYSE:OMC) agencies and will give the holding company a “first look” at new advertising opportunities and units as they are developed by Twitter.

“This is the first holding company agreement we’ve done on the mobile ad exchange side,” said Twitter’s president of global revenue, Adam Bain, adding, “It’s great for us because we’ll now have high-quality advertisers coming through the exchange.”

While it is the first agreement for the mobile ad side, Twitter has entered into numerous similar agreements over the last two years. Of note was the agreement it reached last April with Starcom MediaVest Group that was believed to have been a two-year deal valued at $200 million.

While the deals are similar they are each different depending on what the agency is looking for from Twitter according to Bain, “Each one is unique. They’re rooted in the unique points of view these agencies bring,” he said, adding, “This one is unique because it focusses on the tech part of how ads will be delivered.”

Direct sales of ads bought programmatically

Presently, ads which are bought programmatically from the micro-blogging company only reveal themselves across third-party sites in the MoPub network, but Twitter is planning on changing this so so that marketers can buy ads on the Twitter site.

“We haven’t made an announcement about opening up Twitter Inc (NYSE:TWTR) to programmatic buys, but it’s natural that we’ll do it,” Mr. Bain said. It’s a fairly safe bet that now that this deal with Omnicom has been finalized that the agency group will be the first company to make these direct programatic buys.

“Our agreement with Twitter Inc (NYSE:TWTR) reflects what we look for in a media partnership – the opportunity to deliver first-to-market benefits that impact all aspects of all Omnicom Group Inc. (NYSE:OMC) clients’ digital investments, from content to placement to measurement,“ a statement from Omnicom read.

While the deal shows forward thinking on Twitter Inc (NYSE:TWTR)’s part, they are not the only social network signing into these partnerships. Just last week, Facebook Inc (NASDAQ:FB) signed its own deal with Publicis that is worth “hundreds of millions” of dollars in the aim of further integrate the data between the two companies.


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