Long criticized for
its immature ad strategy, Twitter is expected to rapidly expand ad revenues in 2011 and beyond, according to a new forecast from eMarketer.
This year, Twitter will see ad revenue grow 210% to
$139.5 million -- up from just $45 million in 2010, eMarketer estimates.
By 2013, meanwhile, eMarketer estimates worldwide ad revenues at Twitter will reach nearly $400 million.
"Since their
debut in April 2010, Twitter's Promoted Products have proven successful in the U.S.," eMarketer principal analyst Debra Aho Williamson explained. "Marketers have seen solid engagement rates with
Twitter advertising -- in some cases better than those on Facebook -- despite Twitter's relatively smaller audience."
Earlier this year, Twitter reported that 80% of advertisers return to use the
products again, while the average engagement rate for Promoted Tweets is between 3% and 5%.
Optimistic though it is, eMarketer's Twitter outlook has actually been revised downward from earlier
this year -- a result of Twitter's slower-than-expected rollout of several ad offerings, including ad sales offices in markets outside the U.S. and a platform for advertisers to buy ads on a
self-serve basis.
In January, eMarketer forecast that Twitter would have $150 million in ad revenue this year.
Looking ahead, however, eMarketer now expects Twitter to achieve
stronger-than-expected growth in ad revenue next year. In 2012, Twitter will earn $260 million in worldwide ad revenue -- up 86.3% over 2011, according to the research firm.
International ad
revenue will reach $26 million, or 10% of total ad revenue, eMarketer estimates. Previously, eMarketer forecast that worldwide ad revenue would reach $250 million in 2012.
"Twitter took several
months longer than expected to start selling advertising in the UK, but more international offices are coming soon," Williamson said. "In addition, the self-serve platform has been in development for
some time. When it launches, it will open up Twitter to more small and midsize advertisers."
"Twitter is looking to compete for the same advertisers that made Google and Facebook's self-serve
advertising platforms smash hits," Williamson added. "Self-serve advertising accounts for about 60% of Facebook's ad revenue -- that's a pinnacle Twitter will hope to reach as well."