Twitter's $150 Million Ad Revenue Just The Tip Of The Iceberg?

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Market research firm eMarketer estimates that Twitter will generate roughly $150 million in advertising revenue this year, the majority coming from inside the U.S. -- up from $45 million in 2010. Growth in 2012 could see the social site hit $250 million. Of course, guarantees are not part of the forecast, but could a local focus push the site's ad revenue even more?  

Debra Aho Williamson, eMarketer principal analyst, says the forecast is predicated on continuing to grow the user base, returning marketers wanting to use the service, and launching a self-serve platform that will open Twitter to a wide range of advertisers -- the kind already on Facebook and Google, she says.

"Geotargeting should launch in the first half of this year," she says. "Not just country targeting, but different locations in a country. It would allow Twitter to enter international markets and gain budgets from international advertisers, as well as regional and local advertisers."

Today, Twitter offers location-based features, but does not offer geotargeted ads, so global or national campaigns work best. "Geotargeting is coming this year," confirms Matt Graves, a Twitter spokesperson.

Smaller local companies can expect an ad offering this year, most likely through a self-service platform similar to Facebook and paid-search platforms such as Google's AdWords and Microsoft Bing's adCenter. More than 90 brands have worked with Twitter since launching the Promoted Tweets service in April, Graves says. The majority of those companies sit on the list of the top 250 brands -- Coke, Ford, National Hockey League (NHL), and Verizon -- which is where Twitter focuses much of its efforts today.

The NHL on Dec. 31 ran its first promoted tweet on Twitter, drawing attention to the New Year's Day broadcast of the 2011 Bridgestone NHL Winter Classic. Michael DiLorenzo, senior director of social media marketing and strategy at the NHL, calls the campaign "successful."

DiLorenzo explains that the NHL had three times the typical number of @NHL mentions on Twitter, which doubled during the time the campaign ran the rate of followers the league typically gains -- social media followers the league can lead to NHL.com.

Much of Twitter's efforts continue to focus on building an in-house direct sales team, rolling out an offering to a wider and more diverse audience of advertisers -- not just major companies like the NHL, but also mid-size and smaller companies. A self-service model could assist the local country music bar in Long Beach, Calif., Cowboy Country, to find new customers, for example.

The bar's proprietor, Ken Littleton, lets his personal Facebook page market the biz, while the Cowboy Country Facebook page sits unattended. The company's Twitter site -- @ccsaloon -- has remained dormant since October. His focus resides on running the bar, Littleton says, hiring support to crank out the social media stuff.

Not only would a self-service platform supporting geotargeting allow Littleton as well as other local venues to run the show -- it would add followers who tweet, providing free marketing through their own social media endeavors.

Aho Williamson points out that a geotargeted self-serve Twitter ad system will help more than local companies. It will open opportunities to a variety of businesses.

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