Twitter is expected to generate $150 million in advertising revenue this year and $250 million during 2012, according to eMarketer.
New York-based eMarketer arrived at the estimates by aggregating data from numerous research outlets and supplemented the information by interviewing advertisers and people familiar with Twitter’s ad business. It also put a lot of weight on Twitter releasing a self-service promotional platform this year, while citing how ad sales for Google and Facebook exploded after they offered their platforms.
EMarketer analyst Debra Aho Williamson commented in the report: “Twitter is poised to go after the same performance advertising business that has funded much of Facebook’s growth. If Twitter can grow its user base and convince marketers of its value as a go-to secondary player to Facebook, it will succeed in gaining revenue.”
Meanwhile, it’s easy to see how Twitter can get to $30-odd million if it sells a “Promoted Trend” slot for 300 or more days in 2011. That worldwide buy reportedly costs $100,000 per day, appearing in the “Trends” column on the site. National advertisers like McDonald’s, American Express, HP, Starbucks, Mercedes-Benz, and several Hollywood movie brands have tested the buy.
Sales forecasts for Twitter’s two other existing ad slots – Promoted Accounts and Promoted Tweets – would seem harder to pin down. Promoted Accounts appear in the “Who to follow” column on Twitter.com and are targeted in part based upon who a user already follows. Advertisers pay for follows. And Promoted Tweets are seen in user streams and search results on Twitter.com and via HootSuite, TweetDeck, and Google. They are priced on a cost-per-engagement model; marketers are charged for actions such as tweets, re-tweets, and clicks. As with Promoted Accounts, ads are targeted to Twitter users based on their followers and other factors.
EMarketer’s predictions appear to heavily lean on the idea that local, regional, and national advertisers will become more prolific via Promoted Accounts and Promoted Tweets once the self-service platform is unveiled.