Twitter ad revenues to hit $1b next year

LONDON: Twitter is on course to hit global advertising revenues of $1 billion in 2014, and it will earn $582.8 million this year, according to a report released this week.

LONDON: Twitter is on course to hit global advertising revenues of $1 billion in 2014, and it will earn $582.8 million this year, according to a report released this week.

Significantly, it will be mobile advertising that will make up more than 50% of that figure, according to a forecast from eMarketer.

The company's new forecast predicts that 53% of Twitter's ad revenue will come from mobile advertising this year alone. This is up from virtually zero ad revenue from mobile in 2011.

Last year, Twitter said mobile revenues were surpassing web revenues on many days. EMarketer said advertising on mobile devices will be where Twitter sees the most incremental growth over the next two years.

With the $1 billion ad revenue figure in its sights, the study predicts that by 2015, Twitter will pull in around $1.33 billion in worldwide ad revenue with more than 60% of that coming from mobile advertising.

Twitter has also launched its advertising API, and that means significant changes both for Twitter and its advertisers. For the first time, marketers can easily create and manage ad campaigns and buy them through third parties.

Significantly, it allows a major increase in scale for Twitter's advertising business and its ability to generate revenues, which are expected to rise from $350 million last year to about $1 billion by 2014.

The upward revision comes as more advertisers consider how they can use advertising on Twitter as part of their marketing activity and as its reach continues to improve.

According to eMarketer, Twitter has benefited from the increased focus on mobile by competitors like Google and Facebook, which have both expanded their own mobile ad offerings and worked to convince advertisers to shift dollars to mobile devices.

Another factor helping to boost Twitter's ad revenue is the "native" nature of its advertising products and how the integration of the core user experience of the platform allows the company to deliver similar ads seamlessly across multiple devices at high volume.

That has also allowed Twitter to build its mobile advertising business quickly. To give a clearer indication of the speed of its ad business growth this year alone, eMarketer estimated that Twitter will earn $308.9 million in mobile ad revenue in 2013. That is more than the company earned in total from any advertising in 2012, when it made $138.4 million from mobile ads.

The bulk of Twitter's ad revenue is expected to continue to come from the US – about 83% this year, down from 90% in 2012. By 2015, Twitter's continued expansion of foreign sales operations is expected to help non-US ad revenue reach $319 million, up from just under $100 million this year.

This story originally appeared on the website of Marketing, the sister publication of PRWeek at Haymarket Media.

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