Study: Twitter Ad Revenue Grow to $150M in 2011

With 'Promoted Tweets' and Support From Virgin, Coke and Ford, Microblog Becomes More of a Business

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A new estimate from eMarketer suggests Twitter is becoming a little more of a business. The company launched its first ad product -- "promoted tweets" -- in 2010 and netted $45 million in ad dollars, according to analyst Debra Aho Williamson. That was due in part to enthusiasm among brands like Virgin America, Coke, Ford and Verizon to give the untried format a whirl.

Ms. Williamson forecasts nice growth for the company to $150 million in 2011 and $250 million in 2012, but issues that with the following caveat: "This forecast is dependent on Twitter growing its user base substantially." Twitter has 175 million registered users worldwide, but she quotes a Pew study saying only 8% of online Americans use it.

Even with that huge user base and volume, Twitter has remained admirably lean: just 300 employees as of last fall, according to its website.

Ms. Williamson's estimate comes with a couple notes of caution. First, if Twitter continues to scale, it will pass MySpace in ad revenue in 2012, a reminder of what happens when a once high-flying social network gets on the wrong side of the consumer. Second, she notes that while brands have become willing to experiment with new mediums and technologies, it's important to deliver so they keep coming back.

"However, the company has a lot to do to live up to its hype," Ms. Williamson said. "Twitter must work overtime to give its early advertisers a positive experience."

Michael Learmonth is digital editor at Advertising Age. You can follow him on Twitter.
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