13 Apr 2014

Twitter Prepares 15 New Ad Products to Compete With Facebook

By Yuyu Chen at ClickZ

In a further effort to monetize the platform and bring in more ad dollars, Twitter will introduce 15 new ad products over the next six months.

Twitter plans to roll out 15 types of new ads over the next six months in an effort to boost revenue and attract new advertisers, according to reports by The Wall Street Journal (WSJ).

The first batch of these new ad products will supposedly be released in a few weeks. They will follow Facebook's strategy of encouraging users to download apps through Twitter.

Twitter has been broadening its advertising capabilities in the past few years. In mid-2010, the social platform launched the first of its "Promoted Products" in the U.S., namely Promoted Tweets, which soon extended to Promoted Trends. In late 2013, Twitter introduced Tailored Audience Advertising, through which marketers can target consumers based on what they have said in the past. Recently the company unveiled its photo-targeting tool, as well as free "pinned tweets" to select personal accounts.

It's worth noting that the microblogging service launched Twitter Cards in 2012, a technology that enables developers to build apps within tweets. Supported by the Cards technology, Twitter has been experimenting with similar ways it can drive users' engagement with advertisers. For example, most recently it has been beta-testing a "click-to-call" button, which would allow mobile users to engage with a Twitter ad by calling the advertiser directly.

According to the WSJ, Twitter's top executives, including chief executive Dick Costolo, told a group of visiting ad industry executives last week that Twitter Cards would become more open to allow marketers to come up with their own uses of Cards, when they presented a sampling of Twitter's new ad products.

Commenting on Twitter's recent moves, some market participants believe that the social network maybe attempting to mimic Facebook in order to attract ad dollars.

"Twitter has stirred some interest lately, in particular because of new targeting options such as Twitter Tailored Audiences," says Michael Osofsky, chief innovation officer and co-founder at NetBase Solutions, a social intelligence platform that helps marketers analyze and engage with consumers in real time.

"While Facebook offers this, too, it's more likely to be more useful on Twitter because advertisers can use what people have tweeted about for targeting. This is harder to do on Facebook since it is a less public forum than Twitter."

Despite the optimism, Twitter advertising seems to be less cost-effective than Facebook advertising, mainly due to its smaller user base and higher charges.

"One of Twitter's most powerful targeting capabilities is the option to target based on keyword usage. Unfortunately, because Twitter's user base is still relatively small, it is hard to scale out a big enough audience for more niche topics," says Ross Sheingold, chief strategy at Laundry Service, a social media agency.

He further points out that Twitter charges advertisers on a cost-per-engagement (CPE) basis, so inflated costs could be a concern. "When using Twitter ads, advertisers should know their intended business objective and optimize the tweet for that result. If they want to drive link clicks, embedding an image in the tweet might drive up their costs, because they'll get charged when people engage with either of them," Sheingold tells ClickZ.

"To date, Twitter hasn't been as cost-effective at driving direct-response results, but they're clearly trying to change that with the addition of the new ad products. The challenge now is being able to prove that Twitter ads can drive business results as effectively as Facebook has," Sheingold says.

The social network's new ad product rollout comes hot on the heels of a redesign of its users' profile pages, which also happen to look a lot like Facebook's.

Twitter’s advertising revenue more than doubled in the fourth quarter of 2013 to $219.6 million, compared with the same period last year, but the company has yet to turn a profit.

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