Twitter Advertising

As Twitter prepares for its IPO, the spotlight has begun to shine on the company's ability to monetize its user base through ads.  One big complaint right now, is that its user base is too small; Twitter has 218M monthly active users which is one fifth of Facebook's.  According to Twitter's S1, Advertising accounted for about 85% of Twitter's $317 million in revenue in 2012. As a frame of reference, Facebook reported $4.3 billion in advertising revenue last year.  Twitter is looking to raise $1B from its IPO and investors will be looking into the growth of users as a direct predictor for how much advertising revenue Twitter can bring in. I am a believer in Twitter in the longer term and don't think they need to match FB's size to get to significant revenue numbers - the type of interaction between brands, celebrities, and users is of a much higher quality than at FB's.  You choose to follow people based on what you are interested in, not just who are you friends with.  This distinction can be likened to a form of "intent" by the user.

Twitter has also been very active in TV advertising, notably with its NFL partnership. 


http://online.wsj.com/article/SB10001424052702303492504579115753167390832.html

http://allthingsd.com/20130925/twitter-snags-the-nfl-for-another-ad-win/