Dick Costolo, CEO of Twitter, recently hired a team of ad sales directors and staff.
2010 was a big year for social media giant Twitter: the company was valued at $4 billion and its base grew to more than 200 million registered users. When news of the valuation broke, many people thought, “Huh?” The company, which was created in 2006, just recently started generating a profit. But research analysts believe that small to medium-sized advertisers will allow the company to reach that multi-billion dollar appraisal, just like they did with Google’s AdWords and Facebook.
In his recent article “Twitter Big on Smaller Advertisers,” the Wall Street Journal’s Amir Efrati discusses why these smaller advertisers are so crucial to the company’s success. Ad revenues alone are expected to generate $150 million in 2011, up from $45 million in 2010, thanks to the self-service system Twitter is implementing later this year. Proponents of the program are also eagerly awaiting the day advertisers can target users based on their location, a tool made possible by the number of users who access Twitter via smartphones.
Smaller companies are attracted to Twitter’s advertisements because they are almost seamlessly interjected within social conversations. The advertising format includes Promoted Tweets (messages that target users based on their interests), Promoted Trends (ads that appear atop a list of hot topics on the Twitter homepage) and Promoted Accounts (accounts suggested to users by Twitter). While Promoted Tweets run on a pay-per-click mechanism, Promoted Trends can cost up to $120,000 for a 24-hour period.
With many still doubting the ad program’s efficacy, all eyes will be on Twitter’s new CEO Dick Costolo.
