Twitter Betting On Video To Increase Ad Revenue

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Twitter missed its first quarter revenue estimates badly and blamed big-brand advertisers for not increasing their spending as fast as expected. For investors, this news was unsettling, but the micro-blogging firm is assuring them that video will be its new cash source.

Promoted tweets not enough for advertisers

For Twitter, rich brand advertisers could be a reliable source of cash, but it has been facing issues like stagnant user growth, a muddled product strategy, and management turnover. Twitter’s signature ad product — Promoted Tweets — seems to be the culprit. A Promoted Tweet resembles a regular tweet but includes promotional images, text and links. James Douglas, executive director of a social media agency owned by Interpublic Group, told The WSJ that the brands are looking for more immersive advertising like video or interactive ads and hence are moving away from these ads.

Advertisers are waiting for Twitter to deploy improved tools to measure performance and target users, the micro-blogging site said. It expects to launch those improved tools in the fall, and at the same time, will start live-streaming the first of 10 National Football League games. The micro-blogging giant will get 15 ad slots to sell commercials during each game under the new NFL deal.

Last week, the social media platform said it already signed up one major marketer to advertise during the live stream. Last year, the micro-blogging giant launched video ads that began rolling (while muted) as users scroll through their timelines.

Facebook preferred over Twitter

Shelby Saville, president of innovation and investment platforms at Mediavest Spark, notes that Twitter is not yet at the forefront of the video content conversation, and that is where the money is. Mediavest Spark is an ad-buying firm that works on behalf of companies like ConAgra Foods and Morgan Stanley.

Further, Saville indicated that Facebook, Snapchat and YouTube are the places where advertisers usually spend their money on video ads.  eMarketer says digital video ad spending is expected to grow 28.5% this year to $9.84 billion in the U.S. According to eMarketer, Alphabet’s YouTube has the largest share of U.S. video ad dollars at 20%, but Facebook, which began video ads in 2013, is gaining fast. Ad revenue jumped 57% in the first quarter, Facebook said on Wednesday.

Facebook’s Sheryl Sandberg said people are sharing and creating nearly three times more video on the platform than they were a year ago, and this presents a huge opportunity for marketers.

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