San Francisco based micro-blogging website Twitter will introduce a new product aimed at small businesses that promises to be an important part of its revenue generating model.
The new automated advertizing system will let advertisers independently manage their marketing campaigns and budgets without going through sales representatives. The new self service advertizing service, which Twitter announced on its blog this Friday, will be offered in partnership with American Express and at the start will be available to those who use or accept American Express cards. Twitter said on its Friday blog post:
“We’ve partnered with American Express to make it easy for small business owners to advertize on Twitter. American Express Card Members and merchants based in the U.S. will be invited to try this new advertizing solution before anyone else, and American Express will give $100 in free advertizing to the first 10,000 people to sign up.”
User interest in the new service, called “promoted products” can sign up at http://ads.twitter.com/amex. Ads for promoted products will first begin showing up in late March. Twitter’s new promoted products offering is the latest evidence that the microblogging website is gearing up to move into the big leagues with Twitter and Facebook, as it prepares to launch its IPO in the not to distant future. For now, Twitter’s $140 million in marketing revenue barely qualifies as a faint shadow of Google’s $36.5 billion and Facebook’s $3.2 billion (based on data from web research firm eMarketer).
Many investors and fans of social media are watching Twitter’s blog posts regarding new services with intense interest – using the smallest news as evidence of an upcoming IPO date. However, CEO Dick Costello cautioned the company is not guiding their day to day actions or long term strategy based on a desired IPO date or given Facebook’s success with its own IPO: “I don’t look at what other companies are doing. We don’t think in terms of building this company for a particular IPO date. We are trying to build this company for the long term. “ Twitter raised $700 million in funds last year, so raising additional funds is not an immediate concern.
Twitter’s new self service advertizing system will work much like Google’s with advertisers able to set a limit for how much they will spend, the regions where their ads will show up, and they will also write their own ads, with a maximum length of 140 characters of course. Advertisers will not have to pay for the ad unless there is some user activity around it, such as a re-tweet, or click on the link, or if a user follows the business.
Twitter will first test the self service advertizing offering to a small group, then open it up to everyone after three months. Costolo is optimistic about its success: “I have every expectation that we will be able to scale this rapidly.”