In a frenzy to secure additional revenue streams in the run up to its IPO, Twitter is reportedly expanding its platform to provide advertisers more value. This may include running ads on third-party websites.
Twitter is gearing up for its planned initial public offering (IPO), although information gleaned from its S-1 submission to the securities and exchange commission, the company is not as profitable as potential investors would want it to be. While the company had a revenue of $270 million in 2012, Twitter was at a net loss of $79.4 million.
Given this, the social networking company is reportedly in plans to serve advertisements on third-party websites, using its own platform to mine data about user interests and preferences. This ties up well with Twitter’s recent acquisition of mobile advertising firm MoPub. According to analysts, as Twitter has already gained inroads into users’ mobile devices (compared to other platforms like Facebook, which were not as fast to adopt to mobile), the MoPub acquisition will position the company as a capable player in the advertising space.
“They need to find a way to bring new advertising products to market. Leveraging the massive amount of data and information inherent to Twitter makes a ton of sense,” said Brian Lesser, CEO of WPP’s Xaxis, a digital advertising and data group.
According to Lesser, Twitter’s plans to serve ads on websites using its own firehose as a data source for interests “makes it easier for advertisers to do that accurately with high-quality data, targeting and measurement.”
Twitter did not respond to media inquiries as of this update, although its SEC filing for IPO indicated that the company does intend to explore additional revenue sources, which might include advertising on third-party platforms and websites. Twitter plans to “grow MoPub’s current business, including by extending advertising across the mobile ecosystem through the MoPub exchange.”
In growing its ad business to cover other platforms, Twitter is said to be addressing two concerns. First, it can monetize its social network without necessarily flooding users’ timelines with sponsored tweets. Secondly, it can grow its audience beyond its current user base (about 215 million active users, according to recent counts).
Once Twitter pushes through with its IPO, users can perhaps expect Twitter ads and recommended postings to appear on both the Twitter stream, mobile devices and third-party sites.
Source: Financial Times / Image: BGR