Twitter Ad Revenue to Reach $139.5M in 2011: Report

EMarketer Projects Twitter's Global Ad Revenue Will Be $400M in 2013

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EMarketer is projecting that Twitter's global ad revenue will reach $139.5 million in 2011, up 210% from $45 million in 2010, the first full year the company sold advertising. Ad revenues are forecasted to reach $260 million in 2012 and $400 million in 2013.

The current estimated ad revenues for 2011 fall slightly short of eMarketer's January projection, which held that Twitter would earn $150 million this year. The report accounts for the minor disparity by citing Twitter's slower than anticipated opening of international sales offices -- it has offices in London and Tokyo and is now opening one in Dublin -- and the fact that its self-serve ad platform hasn't launched yet.

Principal analyst Debra Aho Williamson said that Twitter has been very deliberate in its approach to rolling out ad products, but the pace has quickened in recent months, with promoted tweets now surfacing in users' timelines and political ads, which were unveiled last week. She expects self-serve ads to have a big impact on Twitter's revenues, when they're eventually launched.

"Self-service is extremely successful for Facebook and Google," said Ms. Williamson, who noted that self-serve ads are estimated to comprise as much as 60% of Facebook's revenue. "So self-serve could really open up Twitter to a new category of advertisers that aren't currently using the service."

A Twitter spokeswoman said no specific date has been set for the launch of self-serve ads.

In the report, Ms. Williamson cites solid engagement rates with Twitter's promoted product suite, launched in April 2010. Average engagement with promoted tweets is 3% to 5%, and advertisers only pay when there's user action taken -- retweets, replies, clicks on links, and tweets being marked as "favorites" -- for that particular product.

The split between ad revenues from the U.S. and international markets was 98% and 2%, respectively, for 2010, according to the report. The gap is projected to close slightly by 2013, with the U.S. having an 88% share and the rest of the world having 12%.

EMarketer formed its projections based on analyzing consumer usage, marketer usage, ad pricing, impressions on Twitter and revenue estimates from research firms, as well as interviews with industry executives.

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