To boost its commerce ads and sell more of them, Twitter announced some big moves as part of today’s earnings. It’s acquired commerce ads tech firm TellApart, which was formerly a big Facebook ad partner. Twitter will also now allow its ads to be bought through DoubleClick’s bid manager to help advertisers centralize their buying.
While today Twitter managed to exceed user-growth estimates, it fell short on revenue, making these advertising developments more important than ever.
Interestingly, Twitter CEO Dick Costolo was an angel investor in TellApart. Costolo invested in TellApart’s $4.8 million Series A in 2010. Due to his financial interest in the deal, Costolo may have had to stay at ‘arm’s length’ to avoid unfairly influencing the deal.
Other investors that brought TellApart to a total of $17.8 million in funding include SV Angel, Harrison Metal and Greylock Partners. Along with social ads for e-commerce retailers, TellApart also offers a way to place ads in other companies’ emails to potential customers.
Josh McFarland, co-founder and CEO of TellApart, said “TellApart’s strengths in personalization, dynamic product ads, commerce data and with retail advertisers are strong complements to Twitter’s deep experience in mobile, understanding users and the app ecosystem.”
TellApart hit a $100 million revenue run rate in 2013. But the company also bet big on Facebook’s FBX ad exchange, which the social network stopped focusing on last year. That may have caused some turbulence that made the acquisition by Twitter a smart move. At Twitter, it plans to focus on aiding cross-device targeting and online/offline measurement, so advertisers can reach users wherever they are, and ensuring that no matter where someone sees an ad or makes a purchase, Twitter can get credit.
Through the partnership with Google’s DoubleClick ad exchange, ad agencies and other buyers will be able to purchase inventory on websites around the web, as well as Twitter Promoted Tweets from a single interface. Making Twitter ads easier to buy from one of the world’s most popular tools could help boost revenue. That’s something Twitter needs given it missed revenue estimates in today’s earnings.
Twitter is also hoping to strengthen advertiser confidence in the return on investment of its direct response commerce ads by working with DoubleClick to properly measure when clicks or actions on Twitter lead to a purchase or conversion. The program will roll out later this year, so advertisers can attribute purchases to Twitter ads across platforms, regardless of whether the ad views or purchases happened on the web or mobile.
Twitter now has over 300 million users, including many highly engaged, influential and wealthy people. Still, its limited biographical data for targeting and relative size to top ad platforms like Google and Facebook has hindered its monetization.
Buying ads technology and partnering with top players could help Twitter better leverage its place in people’s lives to become a serious money-maker. It may take these new developments a few quarters to spin up, but they could boost the big bird’s bottom line with time.
We’ll have more details soon.