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.
