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Twitter Ad Revenues to Grow 210% to $139.5 Million in 2011

Ad dollars expected to triple this year

NEW YORK (Sept 28, 2011)—Twitter is expected to rapidly expand its advertising revenues in 2011 and the years following, according to a new forecast from eMarketer.

eMarketer estimates global ad revenues at Twitter will grow 210% to $139.5 million in 2011, up from just $45 million in 2010, the company’s first full year of selling advertising. By 2013, eMarketer estimates worldwide ad revenues at Twitter will reach nearly $400 million.

“Since their debut in April 2010, Twitter’s Promoted Products have proven successful in the US,” said eMarketer principal analyst Debra Aho Williamson. “Marketers have seen solid engagement rates with Twitter advertising—in some cases better than those on Facebook—despite Twitter’s relatively smaller audience.”

Earlier this year, Twitter reported that 80% of advertisers return to use the products again, while the average engagement rate for Promoted Tweets is between 3% and 5%.

This forecast features a slightly lower 2011 ad revenue estimate than eMarketer’s previous forecast from January 2011—a result of Twitter’s slower-than-expected rollout of several ad offerings including ad sales offices in markets outside the US and a platform enabling advertisers to buy ads on a self-serve basis. In January, eMarketer forecast that Twitter would have $150 million in ad revenue this year.

However, Twitter will have stronger than expected growth in ad revenue next year. In 2012, Twitter will earn $260 million in worldwide ad revenue, up 86.3% over 2011. International ad revenue will reach $26 million, or 10% of total ad revenue, eMarketer estimates. Previously, eMarketer forecast that worldwide ad revenue would reach $250 million in 2012.

“Twitter took several months longer than expected to start selling advertising in the UK, but more international offices are coming soon,” Williamson said. “In addition, the self-serve platform has been in development for some time. When it launches, it will open up Twitter to more small and midsize advertisers.”

“Twitter is looking to compete for the same advertisers that made Google and Facebook’s self-serve advertising platforms smash hits,” Williamson added. “Self-serve advertising accounts for about 60% of Facebook’s ad revenue—that’s a pinnacle Twitter will hope to reach as well.”

eMarketer forms its estimates for advertising spending on Twitter through a meta-analysis of estimates of consumer usage, marketer usage, ad pricing, and impressions on Twitter, as well as revenue estimates from research firms and other sources. eMarketer also conducted interviews with industry executives who provided perspective on Twitter’s advertising business and revenues.

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Clark Fredricksen
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Posted on September 28, 2011.