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.
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"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.
