Twitter introduced keyword ad targeting Wednesday, based on terms typed into user timelines. The company believes the real-time feature will improve the experience with ads, as users see more relevant Promoted Tweets.
The feature gives brands the ability to target ads based on words in tweets, similar to the way Google does in search engine queries and Gmail in email content. The company said it will not show ads more frequently, and Twitter users can still dismiss Promoted Tweets they don't find relevant.
In early trials with Everything Everywhere, @EE; Microsoft Japan, @surfaceJP; and Walgreens, @Walgreens; users were significantly more likely to engage with Promoted Tweets using keyword targeting in timeline, compared with other forms of targeting in the timeline, explains Nipoon Malhotra, product manager of revenue at Twitter.
The service will roll out across Twitter's ad network, supporting 15 languages in all markets where it serves ads --including on mobile devices, which analysts believe will soon contribute the majority of the site's revenue.
Most of Twitter's ad revenue still comes from the U.S., about 83% this year vs. 90% in 2012, according to eMarketer. The data firm estimates the social site should garner $582.8 million in global ad revenue in 2013, rising to nearly $1 billion in 2014.
53% of Twitter's ad revenue will come from mobile advertising this year -- up from virtually none in 2011, according to eMarketer. The firm estimates Twitter will earn $308.9 million from mobile ad
revenue in 2013, up from $138.4 million from mobile ads in 2012.
Google built its business on real-time marketing -- the ability to serve relevant ads at the moment the potential customer shows interest in a specific topic, product or service. "Twitter is creating its own native advertising extension, going one level deeper than hashtag targeting by taking advantage of those digital marketers obsessing for years about search keywords," said Kevin Lee, Didit founder. "Perhaps they hope advertisers will simply upload their Google AdWords paid-search campaigns into Twitter."
Time will reveal the tweeted keywords that actually predict Internet purchases, Lee said, but Twitter users may find it "creepy" to see ads based on keywords in tweets. Still, the opportunity remains huge, because many tweeters don't use hashtags that provide targeting opportunities, but their choice of keywords reveals a lot about interests.
Jason Stein, president and founder of social media agency Laundry Service, agrees that Twitter's opportunity to reach consumers remains unique. Facebook cannot offer something similar because the frequency of user-generated content is much higher on Twitter, especially when bucketed into the "what's happening now" bucket, he said.