Twitter Looks to Follow Facebook with New Ad Exchange

Following in the footsteps of Facebook, Twitter is planning to roll out a new service that will allow brands to target Twitter users based on their search history, browsing history and interactions with cookie-based websites.
 
Twitter isn’t new to the advertising game; its promoted tweet function has been in place since mid-2011. This more traditional function allows brands to essentially purchase virtual advertising space by sending out a tweet that will automatically show up in an enormous number of users’ Twitter timelines.

Everything indicates that this new form of advertising will be modeled after Facebook Exchange, which uses cookies to notify a client when a user accesses Facebook and allows the client to enter a bid to target that user on Facebook. It stands to reason that Twitter’s service will be similar in most major aspects, with the obvious exception of targeting via the Twitter timeline and not the Facebook timeline.

Interestingly, Twitter’s inherent focus on brevity of content and particular buzzwords in the form of hashtags may make this type of advertising incredibly popular and effective. Rather than forcing companies to analyze their search and browsing histories from sites that use cookies, consumers are providing a series of targeted buzzwords that perfectly embody their thoughts. By precisely identifying these thoughts, companies will be able to deliver almost-perfectly targeted advertisements.

While current exchange-based advertising models are certainly effective, they may not accurately convey a consumer’s intent. While someone may peruse through real estate listings, it doesn’t necessarily signify that they are looking for a house. However, Twitter’s intensely personal format can provide much more information, which can, in turn, allow for ads to be targeted even more precisely.

While Facebook rolled out its Exchange service after its IPO, it looks like Twitter is planning to do it beforehand. Debuting a similar service could certainly be a way to generate revenue and attention in the months prior to Twitter’s IPO, which is planned for sometime early next year. The highly tailored ads that could potentially result from the proper development and implementation of such a service could push Twitter’s ad revenue well beyond next year’s projected $950 million, which could be incredibly helpful when it comes to ensuring a successful IPO, unlike Facebook.

[Source: AdAge]

Original post: http://tier10lab.com/2013/06/05/twitter-to-follow-facebook-new-ad-exchange/

Guest post by Eric Huebner.