In the near term, the deal is intended to drive up the number of
buyers in Twitter's own ad ecosystem by ushering in brands that
want to buy ads in real-time. The company's VP-product for revenue
Kevin Weil said that MoPub's technology will be used to let Twitter
advertisers bid on available impressions of users who match a
certain category based on their web activity (i.e., auto
Twitter will eventually open up the bidding on segments of its
ad inventory to MoPub's programmatic buyer customers, which will
enlarge the number of participants in Twitter's ad auction and
presumably drive up prices. He said that he expects the deal to
close next quarter.
However, in the longer-term, there's a more expansive play,
which may involve showing mobile ads to Twitter users in other
environments. Mr. Weil said he ultimately expected the deal to
result in more types of native ad placements across the mobile
ecosystem, and not necessarily promoted tweets populating
third-party apps, though he didn't go into detail.
"We believe that there are opportunities to improve the state of
mobile advertising in general," he said. "One of the areas that
stands to improve is the state of creative in mobile."
Guarding User Experience
As Twitter has grown as a business, one of the big questions
about the sustainability of its ad model is whether it will simply
show more ads to users as it acquires more advertisers. Purchasing
MoPub potentially gives it a way to satisfy demand while ensuring
that users aren't over-exposed to ads.
Assuming future high demand on Twitter, the company could
hypothetically accept bids on the mobile exchange and opt to accept
the highest-priced ones it receives to run as promoted tweets,
while letting the lower-priced remnant be published within MoPub's
marketplace of third-party apps. The end result for Twitter could
be a greater share of mobile ad dollars funneling through its
Mr. Weil said that Twitter doesn't intend to show more ads to
users in order to satiate increased advertiser demand.
"There are no plans to change any of our quality thresholds," he
Acquiring a mobile ad exchange is a way for Twitter to crank its
mobile ad revenue as it marches toward an anticipated initial
public offering in early 2014. EMarketer projects Twitter will
bring in $308.9 million in mobile ad revenue this year and $551
million in 2014.
Contributing: John McDermott.