Omnicom, Twitter Sign $230M Multi-Year Agreement

Omnicom Media Group announced Tuesday a first-of-its-kind deal with Twitter that integrates the agency's programmatic ad-buying unit Accuen with the social network's mobile ad exchange MoPub, which reaches more than 1 billion devices a month.

The two-year deal, worth $230 million, will strengthen the social site's global position and make it a formidable partner to help agencies integrate offline and online media. 

Focused on securing ways to use mobile ad technology, MoPub was built as a programmatic ad-serving backbone. It appears that this will become the future of Twitter's business, enabling companies to leverage at massive scale.

For Omnicom's holding companies, the deal secures ad rates and provides a preview of ad units and opportunities being developed by Twitter. The two companies will work to generate real-time insights from the platform, as well as cross-channel attribution between mobile and non-mobile media, according to an Omnicom spokesperson.
 
Jonathan Schaaf, Omnicom Media Group's president of U.S. digital investments, said the holding company has a "bottom-up client-driven approach, rather than top down to force the inventory." It's an easier way to drive a higher return on investment back to clients investing in the media. " As the relationship grows it will accrue additional benefits," he said. "That's how we structure deals to become better business partners."
 
Schaaf sees the possibilities of integrating Twitter ads with radio, TV and other types of media, but declined to elaborate. "Once the programmatic element becomes more pervasive across Twitter's network, I see that as something we can leverage," he said. "By forming a closer business relationship with Twitter we open all kinds of different relationships."

Twitter president of global revenue Adam Bain told The Wall Street Journal that ads purchased programmatically only serve up across third-party sites across the MoPub network, but it plans to allow marketers to buy ads on its own site also. Omnicom's agencies are likely to become the first to purchase ads programmatically.

Pivotal Research Group senior research analyst Brian Wieser estimates Twitter will generate $1.2 billion in ad revenue this year and $2 billion next year. "Our somewhat cruder forecast on MoPub calls for $675 million in trading activity this year and $1.2 billion in trading activity next year (one-tenth of which the company will book as revenue)," he wrote in a research note published Tuesday. "By 2018, we think the total company will generate $4.9bn of total revenue."

The agreement -- which also includes media agencies OMD and PHD -- seems similar to announcements made by Twitter and Publicis' Starcom MediaVest group in April 2013, worth a reported $200 million, per Wieser. He also compares it to Omnicom's approximately $100 million agreement with Facebook's Instagram earlier this year and this month's announcement between Facebook and SMG worth a reported $500 million. 

The deal should strengthen Twitter's global position as it helps Omnicom agencies to better support clients in social media marketing. eMarketer estimates the number of users on Twitter will climb double-digits through 2018, up 24.4% this year.

The number of Twitter users in Asia-Pacific has already surpassed North America and Western Europe. In fact, Asia-Pacific will account for 32.8% of all Twitter users this year, compared with 23.7% in North America, the second-largest region for Twitter users, per eMarketer.

By 2018, Asia-Pacific will have more than 40% of the world's Twitter users, more than doubling North America. If on track, eMarketer projects Twitter will grow more than 10% to reach nearly 400 million users globally within four years. It will make the connection between broadcast television and online social media stronger.

This story has been updated.

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