April 18, 2014, 12:18 PM

Twitter bids for a larger share of mobile ad revenue

The microblogging service aims to make money on mobile ads by connecting its 241 million users with the more than 130 billion monthly mobile ads served by MoPub, a mobile app advertising marketplace Twitter bought last year. MoPub ads encourage consumers to download the mobile apps of retailers and consumer-oriented services.

Lead Photo

Spotify's mobile app ad on Twitter

Twitter Inc. announced yesterday its first foray into mobile app ads that promote the installation of mobile apps and appear within the Twitter feed for consumers accessing the microblogging service from tablets or smartphones.

Twitter also announced the integration of its ad platform with that of MoPub, a network already distributing ads in mobile apps that Twitter bought in October. This integration will connect Twitter’s 241 million users to MoPub’s directory of ads as well as Twitter’s advertisers to MoPub’s network of mobile app users.

“The MoPub Marketplace reaches more than 1 billion unique devices and handles more than 130 billion ad requests inside Android and iOS applications every 30 days, making it one of the largest mobile ad exchanges in the world,” Kelton Lynn, a revenue product manager at Twitter, writes in a blog post.

On Twitter, these ads will look very similar to Promoted Tweets, with the addition of a Download button, app ratings and download stats near the bottom of the Tweet. For example, a Spotify ad on Twitter includes the brand’s Twitter handle and tweet text that reads “Play your favorite artists & albums for free, and get personal recommendations. Get the app.” There is also a Download button and information about the Spotify app. Clicking on the Download button opens the Apple App Store or Google Play where the consumer can download the Spotify app.

The partnership broadens Twitter’s mobile ad ecosystem, Lou Kerner, a social media analyst and investor at The Social Internet Fund, says. The app install ads are important to retailers because they more widely distribute the retailers’ app.

Mobile app ads have been successful for Facebook, which launched them in 2012. Facebook hasn’t released exact figures for mobile app ads, but mobile ads accounted for 53% of its revenue in Q4 2013, up from just 23% in Q4 2012. In 2013, Facebook mobile app ads resulted in 145 million app downloads, the social network says. “It’s obviously been a homerun on the app install side for Facebook, and the expectation is that it’s going to have a similar impact on Twitter,” says Kerner.

Many of mobile app advertisers are game developers, but the format has broad appeal. Facebook has worked with retail clients, including Target Corp. and eBay Inc., to market their apps with such ads.  

Twitter is currently in the midst of testing its new mobile app ads with select clients, including music-streaming service Spotify, hotel-deal site HotelTonight, game developer Kabam and ticket search engine SeatGeek. Twitter declines to release data from those tests.

Facebook’s share of worldwide mobile ad revenue has increased rapidly since 2012, according to research firm eMarketer. In 2012, Facebook captured 5.4% of global mobile advertising revenue. That share jumped to 17.5% in 2013, and eMarketer estimates it could be as high as 21.7% by the end of 2014. Twitter, on the other hand, captured only 1.5% of mobile ad revenue worldwide in 2012. That share rose to 2.4% in 2013, and eMarketer estimates a slight increase to 2.6% by the end of 2014.

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