Twitter ad revenue to near $1 billion in 2014
eMarketer has raised its forecast for advertising spending on Twitter for 2013 and 2014, estimating the company will earn $582.8 million in global ad revenue in 2013 before nearing $1 billion next year.
According to the new forecast, more than half of Twitter's ad revenues—about 53%—will come from mobile advertising this year, up from virtually no ad revenue from mobile in 2011.
Advertising on mobile devices will be where Twitter sees the most incremental growth over the next two years. By 2015, Twitter is expected to pull in $1.33 billion in worldwide ad revenue, more than 60% of which will come from mobile advertising.
The upward revision comes as advertisers have shown more interest in spending money on mobile advertisements on Twitter, and as recent audience figures from multiple research sources analyzed by eMarketer have suggested Twitter's reach is improving.
eMarketer believes Twitter has ultimately benefited from the increased focus on mobile by competitors like Google and Facebook, which have both expanded their own mobile ad offerings and worked to convince advertisers to shift dollars to mobile devices. The launch of the Ads API will also contribute to incremental growth for Twitter this year, though eMarketer had already built that product into its December forecast for mobile ad revenues.
Twitter also continues to benefit from what has been termed the “native” nature of its ad products, whose integration with the core user experience of the platform allows the company to deliver similar ads seamlessly across multiple devices at high volume. It also means the company has been able to build its mobile advertising business quickly.
eMarketer estimates Twitter will earn $308.9 million in mobile ad revenue in 2013—which is more than the company earned in total, from any ad type, in 2012, when it made $138.4 million from mobile ads.
The bulk of Twitter's ad revenue is expected to continue to come from the US—about 83% this year, down from 90% in 2012. By 2015, Twitter’s continued expansion of foreign sales operations is expected to help non-US ad revenue reach $319 million, up from just under $100 million this year.
eMarketer forms its forecast through an analysis of estimates from many research sources that track media buying trends, advertising and other revenue indicators; Twitter usage statistics from research firms and user surveys; and eMarketer interviews with executives at ad agencies, brands, online ad publishers and other industry leaders.
While eMarketer's estimates for Twitter's revenue in 2012 remain unchanged compared to the previous forecast, the figures for future years have increased significantly to reflect the company's recent trajectory. eMarketer forecast in September that Twitter would earn just over $800 million in 2014, and did not issue an estimate on 2015 revenue.
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