A source tells Peter Kafka of AllThingsD that Twitter’s ad sales will hit $350 million this year.So Twitter’s ad business has gone from a joke to an experiment to a reality in a few short years.
What will drive advertising sales this year is more precise ad targeting and the removal of various arbitrary-seeming limits on the kind of Twitter ads businesses can buy.
- Advertisers can now target all of Twitter’s 140 million users with Promoted Tweets. Previously, they could only target people who followed a company’s account or followed similar accounts.
- There’s effectively no longer a minimum price for bids. Twitter charges per “engagement,” which can mean a reply, a retweet, or bookmarking a tweet as a favourite. It’s dropping the minimum bid from 50 cents to 1 cent.
- Advertisers can target users based on what they’re interested in. Twitter has set up 350 “interest categories,” and advertisers can also target ads to followers of a specific account.
The latter is particularly interesting. In 2010, Twitter hired Adam Bain, a former Myspace executive to run sales. While Myspace’s business crumbled as its audience abandoned it, the company was on to something with “hyper-targeted” ads, which let advertisers show ads based on users’ interests.
The difference is that Twitter’s audience is growing, not shrinking, and its “interest graph”—the information Twitter deduces about users based on the accounts they follow—appears to be far more valuable than Myspace’s friends lists.