The Twitter experiment on Madison Avenue just got more serious.
While marketers are dabbling in Twitter's real-time stream of 140-character missives, and some brands have built teams to interact on Twitter in real-time, investment of ad dollars has been relatively small.
Until now. On Monday, Twitter announced that it had completed multi-year deal with Starcom MediaVest Group, a unit of Publicis, the world's third-largest ad holding company, which represents marketers like Procter & Gamble, Walmart and Coca-Cola, worth hundreds of millions of dollars.
While details of the deal, first reported by the Financial Times newspaper, are vague, the implications are clear: it's both a big vote of confidence in Twitter and a sign of how seriously marketers are now taking platform.
"Over the past few years, Twitter has peen perceived as being in the 'experimental' budget, but SMG clearly doesn't think Twitter is experimental for them anymore," said Debra Aho Williamson, analyst at eMarketer. "They believe Twitter is a vehicle they need to be a part of on an ongoing basis."
Both Twitter and SMG were vague on how the deal is being structured and valued. Neither would say whether the deal includes guaranteed ad buys on Twitter, or if its just an estimate of the value of deals Twitter might get with SMG clients. SMG parent Publicis' acquisition of Razorfish from Microsoft included $500 million in guaranteed ad spending, which rankled some Publicis clients which felt forced to buy Microsoft ad products.
SMG did say its clients will get first dibs on premium Twitter inventory, as well as new ad units still on the drawing board.
SMG CEO Laura Desmond said the agencies' clients would have an advisory role -- much like Facebook's "client council" -- on ad products, as well as preferential pricing and access to desirable inventory. That's not uncommon: the biggest ad spenders typically get the best pricing and perks from media-sellers.
In addition, and perhaps more importantly, SMG and Twitter will conduct research together on Twitter's impact on consumers and brands, including a "social TV lab" to study the relationship between Twitter and TV. "What we'll be able to do is get better consumer data, trend info and audience segmentation to feed into planning and modeling to make better decisions," Ms. Desmond said.
Twitter bought social TV analytics firm Bluefin Labs in February, and has a data partnership with Nielsen.
Twitter will also survey its users on behalf of SMG with questions that appear in-stream in user feeds (e.g., asking users about their music-listening habits), according to Matt Derella, Twitter's agency relations chief who formerly oversaw Google's relationship with Publicis. And the Twitter ads API will be integrated into SMG's proprietary analytics tool to help optimize buys -- a first for agencies.
Ms. Desmond observed that clients like Samsung, Microsoft, P&G and Mondelez for Oreo have worked closely with Twitter over the past 18 months, and SMG felt confident that a deeper investment was warranted based on the results.
"We think it's [become] a media company that needs to be considered and evaluated strongly," she said.
Twitter's SMG deal is unprecedented for its size. Facebook secured a $10 million investment from Interpublic Group in 2006 and then later sold its stake for $133 million last year. That deal had no guarantee of ad spend.
The commitment could put Twitter's revenue on course to reach $1 billion faster than anticipated. EMarketer's most recent estimates project that Twitter's worldwide revenue will reach $582.8 million this year and $950 million in 2014.
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