Bloomberg News

Twitter Sales Estimate Cut by EMarketer on Slower Ad Rollout

September 28, 2011

(Updates with comment from analyst in third paragraph.)

Sept. 28 (Bloomberg) -- Twitter Inc.’s advertising revenue will reach $139.5 million this year, according to EMarketer Inc., which pared its estimate from $150 million because the microblogging website has been slow to roll out some services.

Twitter hasn’t yet added expected advertising products such as a “self-serve” platform that lets customers set up their own ads, the research firm said in a report. Still, even the reduced estimate means ad revenue may more than triple in 2011, and sales will rise more than expected in later years, EMarketer said. Global ad revenue is predicted to reach almost $400 million by 2013.

“They’ve been taking it slow,” said Debra Aho Williamson, an analyst at EMarketer in Seattle, adding she had expected the self-serve program by this summer. “User experience is very important to Twitter. That’s why they’ve been very careful.”

Twitter, which earlier this month said it surpassed 100 million active users, is aiming to drive revenue by wooing advertisers and leveraging its membership base, which includes celebrities, politicians and journalists. The company in July said it would begin highlighting advertisers’ promotional messages, called “promoted tweets,” in some user feeds.

The San Francisco-based company will benefit from more global sales offices in the future, according to EMarketer. The company may bring in $259.9 million in ad revenue in 2012, up 86 percent from 2011. International ad sales will make up 10 percent of the total in 2012, up from 4 percent this year.

Twitter should roll out the self-serve ad platform by next year, according to Williamson. Rivals Google Inc. and Facebook Inc. already use self-serve systems, which automate the ad- buying process.

“What this will do is just open up the floodgates, and enable Twitter to offer advertising to small and mid-sized companies that maybe don’t have the capacity to work with the direct sales team,” she said.

--Editors: Nick Turner, Jillian Ward

To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net.

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.


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