Yesterday Twitter launched interest-based targeting for their advertising products, allowing brands and marketers to target users based on the content of the tweets they send and the accounts they follow.
Along with this announcement came a somewhat overlooked fact: Twitter is lowering their minimum ad bid from 50 cents to just one penny. And some analysts believe this move could bump up their yearly ad earnings significantly.
All Things D‘s Peter Kafka has the inside scoop on Twitter’s ad revenue from “someone smart who doesn’t work at Twitter.” This unnamed source believes that Twitter will earn $350 million in revenue this year – a number that’s up from eMarketer‘s prediction earlier this year of just $259.9 million.
The cause of this massive jump in predicted revenue is two-fold: lower prices for advertisers and interest-based targeting.
Lower ad prices mean Twitter can attract more advertisers, especially those who have been on the fence about whether or not to split their social media ad dollars between Facebook and another network. At one penny, you can’t really go wrong with a Twitter ad experiment if you’ve got even a small marketing budget.
And being able to target by interest will no doubt sweeten the deal for advertisers who are used to Facebook’s methods of serving ads. Although, as we discussed yesterday, Facebook collects user-submitted interest data while Twitter makes inferences about user interests based on actions and content, the premise is the same: showing ads that coincide with a user’s interests will make them more likely to share, click and ultimately buy. Advertisers know this, and Twitter now has a chance to play in the same league as Facebook.
Twitter’s ad products are in their nascent stages still, so all of these revenue projections are based on speculation at the moment, but we’ll have a clearer picture of how advertisers respond to the new lowered price and interest-based targeting in a few weeks.
(Money image via Shutterstock)