Twitter Hatches a Google Deal Amid Disappointing Earnings

Brands can now buy ads seamlessly from both digital companies

Photo Illustration: Alfred Maskeroni; Sources: Getty Images

On the same day it released disappointing first-quarter earnings and watched its stock tumble 18 percent, Twitter announced a new deal with Google that it hopes will lift the business. Now, when brands buy ads on Google they can also order Promoted Tweets as part of the mix.

The deal places Twitter's ad inventory in front of Google's DoubleClick Bid Manager clients. Lately, Google and Twitter have become much closer, a marriage of necessity, with Facebook rising as the go-to platform for targeted digital advertising.

Earlier this year, Google started serving tweets more prominently in search results. Google also is building a data management platform called DoubleClick Audience Center, which could eventually help brands target their ads more effectively, including on Twitter.

Both companies have powerful data resources that, if combined, could give advertisers what they're looking for.

"Together with Google, we're making it possible for Twitter advertisers who use DoubleClick to measure when conversions result from views and other actions on Twitter," the social messaging company said in its release today. "Later this year, advertisers will be able to use a new attribution model in DoubleClick to get a fuller understanding of how Twitter Ads served on mobile or desktop drive conversions for them across the Web."

The ad partnership couldn't have arrived at a more important time for Twitter, which has been struggling to break a perception that the company can't grow users like Facebook, Instagram and younger rivals.

Advertisers are still not fully sold on Twitter, either. One digital ad executive said, "We're asking why should we spend with Twitter when what Facebook is doing is mind-boggling?"

A data partnership with Google could help answer those questions.

Wall Street troubles

Today, Twitter announced that its Q1 ad sales totaled $388 million, a 72 percent lift year over year. Eighty-nine percent of such ad revenue was generated via mobile devices.

That may seem like good news, but Wall Street wants more—which makes the Google deal even more crucial. Twitter reported total revenue of $436 million, lower than Wall Street expected, and a net loss of $162.4 million. To make matters worse, the numbers leaked out before the conference call, sending the stock price down 18 percent.

During the call with analysts late this afternoon, Twitter CFO Anthony Noto blamed the revenue shortfall on the performance of its direct-response marketing products—the kind of ads that drive Web visits, e-commerce, app downloads and other actions. Noto said better targeting and measurement, driven by better insights from data, are the key to increasing the value of those ads.

The overall numbers left analysts like Jackdaw researcher Jan Dawson scratching their heads about where the San Francisco company's future was headed.

Twitter did top 300 million active users for the first time.

It also revealed that it bought a retail-focused vendor called TellApart to help boost its marketing technology and retargeting capabilities.

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