Twitter Offers Promoted Videos For Brands

Twitter is now offering brands the chance to prominently feature video ads above user timelines.

Dubbed First View, the units occupy Twitter’s most valuable advertising real estate for 24 hours at a time.

“When users first visit the Twitter app or log in to, the top ad slot in the timelines will be a Promoted Video from that brand,” Deepak Rao, revenue product manager at Twitter, notes in a new blog post.

Twitter, which is expected to announce fourth-quarter earnings late Wednesday, could use all the additional revenue it can get.

Late last year, the social giant said it expected fourth-quarter revenue to reach between $695 million and $710 million -- considerably lower than analysts’ estimates of nearly $740 million. 



“Twitter's ad revenue is still rising, and the introduction of new ad formats, such as First View, will help it capture more digital video ad dollars,” Debra Aho Williamson, principal analyst at eMarketer, said on Tuesday. “But as user growth slows, it becomes more and more important to ask whether Twitter can continue to grow revenue if it can't substantially increase its user base.”

“I believe that it can,” added Williamson. “Twitter has many ways to make money outside of the core service … It has its ad network, and it is starting to show ads to people who visit Twitter pages without being logged in.”

While maintaining its buy rating on Twitter, Pivotal Research analyst Brian Wieser recently reduced the company’s price target from $43 to $34.

Wieser cited “slightly diminished revenue expectations over a multi-year time horizon, and more because of higher capital costs we think are appropriate given reduced confidence investors will have in the stock and the company.

Twitter is taking a number of actions to fight flagging revenue and growth rates. As Williamson mentioned, it recently began letting consumers without Twitter accounts -- and users who are not presently signed in -- follow a variety of content streams in real-time. No niche segment, the company counts about 500 million consumers that visit its property each month without logging in.

Overall, eMarketer estimates that Twitter will have 291 million users at the end of this year -- a jump of 11.1% year-over-year.  According to eMarketer, the user growth rate is decreasing. Next year, the growth rate will fall to 8.8%, then to 7.6% by 2018.

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