In a bid to broaden its revenue streams, Twitter is rolling out the self-serve ad platform to 10,000 small and midsize businesses through a partnership with American Express.
Starting tonight, American Express cardmembers and merchants can register to use the platform on a first-come, first-serve basis and also receive $100 in advertising credits to put toward bidding on promoted tweets and promoted accounts -- hopefully whetting their appetites for more. Twitter had begun the rollout of self-serve, which lets advertisers make electronic payments instead of being invoiced by the sales team, in mid-November with a group of fewer than 20 advertisers and expanded the group to about 100.
CEO Dick Costolo noted that opening the self-serve platform is a key development for Twitter in a potential banner year. The company is also focused on reaching the market for its political ad products and scaling its international ad offerings.
"So many hundreds of thousands and even millions of small businesses have been using Twitter effectively for years already, so by opening up our ad platform to all these folks as a mechanism for them to amplify the value they're already creating," Mr. Costolo said.
As is the case for any of Twitter's 3,000 advertisers, small businesses can set bids for promoted accounts on a cost-per-follower basis and for promoted tweets on a cost-per-engagement basis/ In the latter case they pay only when users actively engage with the tweet (by retweeting, for instance.) While national brands might be bidding on keywords or hashtags associated with major events like the Oscars, which makes bidding competitive and expensive, small businesses would be more likely to bid on highly specific terms and to localize their bids, according to Mr. Costolo. (Twitter currently allows for city-level targeting at its most specific.)
Mr. Costolo pointed to Glennz Tees, an online T-shirt retailer that was part of this winter's pilot group, as a small business that has already had success using the self-serve platform. After a character on "The Big Bang Theory" appeared on the show wearing a Glennz shirt, the owners took to their Twitter account and bought up terms related to the show. Mr. Costolo claims they doubled their holiday sales over the previous year and tripled their Twitter followers.
EMarketer projects that Twitter's ad revenue in 2011 was $139.5 million and will grow to $259.9 million this year and $540 million by 2014. Self-serve is expected to be a cornerstone of Twitter's revenue growth, though its contribution is likely to be small early on while Twitter looks to scale the number of small-business advertisers using the platform, according to eMarketer's principal analyst, Debra Aho Williamson.
Ms. Williamson noted that Twitter's partnership with American Express is typical of its methodical approach to rolling out new ad products.
"One of the big challenges that Twitter was going to face was keeping rogue advertising or spammers from overrunning the systems, and by partnering with American Express and focusing at first on this small subset, it provides an easier roll-out for Twitter," she said.
The self-serve platform will go live for the first group of 10,000 businesses in late March and then be rolled out more broadly.
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