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Summary:

Although both Google and Facebook have so far had little success with mobile advertising, Twitter says that its mobile ads are seeing huge levels of engagement. Is there something about the real-time information network that could make it a superior medium for mobile ads?

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It’s no secret that mobile advertising is the holy grail that virtually every major digital player is trying to find, but no one seems to have cracked the code just yet. Facebook has admitted that while it has almost half a billion users on mobile devices, it still isn’t sure whether its mobile business is working or not, and Google hasn’t blown anyone away with its results so far either. According to some reports, however, one company that is having some success is Twitter — which now sees a majority of its advertising revenue coming from mobile. Is there something about Twitter that makes it more likely to succeed at mobile advertising than its larger competitors?

The fact that Twitter’s mobile advertising accounts for more revenue than its website (which it has said before) is surprising in part because the company has only been offering mobile ads — including promoted tweets, promoted trends and other formats — since earlier this year, while advertising on the website version of the service has been available for much longer. But a majority of Twitter’s usage (about 60 percent or so, according to the company) also comes from mobile devices and apps, so it makes sense that this would become a big part of the advertising model as well.

A million people engaging with an ad in four days

Wall Street Journal story shows that Twitter may be succeeding at something that both Google and Facebook continue to struggle with, and also that it actually has a growing business model that might justify its multibillion-dollar market value. It should also be noted that the piece focuses primarily on the experience of a single company: namely, Chinese-food chain P.F. Chang’s.

But what is interesting is that the company doesn’t just say that the ads it placed were effective — an executive with the chain says the results were “staggering.” Chang’s paid $25,000 to promote its offerings to people who were searching for or interested in terms like “Chinese New Year,” and targeted both mobile and desktop users. In just four days, about one million people clicked on a promoted tweet from the chain, retweeted it or otherwise interacted with it — and about 70 percent of those people did so from mobile devices.

The Chinese-food chain isn’t the only one the Journal mentions: software company CloudOn Inc. also says it has had success with a Twitter ad campaign, generating close to 10,000 downloads of its iPad software. The company said it saw 2.5 downloads for every 100 ad impressions — which it said was three times the download rate of an ad on Twitter.com, and much better than other advertising services (although the story doesn’t say which ones it was comparing this to).

Twitter CEO Dick Costolo

Anecdotal data from two small companies isn’t much evidence to go on when it comes to Twitter’s likelihood of success with mobile ads, but then the company hasn’t been in the business very long either. And more than one advertiser is going to perk up when they see that a retailer had over a million people click on or otherwise engage with a promoted tweet in just four days of a campaign — anyway you look at it, that’s a pretty impressive result. One of the things that’s interesting about Chang’s experience is that other campaigns didn’t work as well. Was there something about the Chinese New Year campaign that made it work better?

Could Twitter be a superior mobile ad medium?

As the Chang’s executive mentions in the Journal story, it’s possible that having a message that is targeted to a very specific event is better than a broad sales pitch for a service. One thing Twitter has going for it is that large numbers of people see it as a mobile information network with real-time content about interesting topics — both news and entertainment related. If a tweet like Chang’s is targeted to an event people are reading about in their Twitter stream, it makes sense that it would get a lot of engagement, and that is clearly what Twitter is counting on.

It is still early days in the mobile advertising market, with mobile ads making up only about 5 percent of all ad spending. But as former internet analyst Mary Meeker noted in a recent presentation, the gap between the amount of time people spend on mobile devices vs. the amount of money advertisers spend there has to close eventually, and that is a massive opportunity — internet users spend about 10 percent of their time on their mobile devices. And both Google and Facebook have their sights set on dominating that market.

Could Twitter as a mobile advertising medium be fundamentally superior to Google or Facebook? The service is arguably far more efficient as a mobile content-consumption platform than anything that the other two web giants have been able to come up with. And Twitter also has the potential to be better at targeting around specific events or locations than either Google or Facebook, which could give it an edge as the market grows. One thing seems obvious: the mobile advertising race is just starting to heat up, and the early signs are that Twitter could turn out to be a strong contender.

Post and thumbnail images courtesy of Flickr user See-ming Lee

  1. The thing that makes Twitter’s mobile platform for ads work so well is that it is very unobtrusive, yet we still see and interact with the ads. They appear as “promoted” tweets or trends, adding information we wouldn’t normally look for, so they add to the experience instead of taking away.

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  2. interesting, PrivCo said Twitter’s ad revenue is falling short of their internal expectations.

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  3. Ben Werdmuller Saturday, June 30, 2012

    The PF Chang’s example is really interesting – but the important part is still to come. A million people clicked on the promoted tweet, but how did this affect their bottom line? Did those people follow through and go eat at Chang’s?

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  4. Users who are engaged with content that interests and like to discover new things are interrsted whether that new content is supplied by a self-curated twitter feed or contextually specific advertiser -that line becomes blurred & doesn’t matter. And it doesn’t matter if the medium is mobile, online, TV or magazines. If I’m reading Vogue and I see a Burberry eyewear ad, I’m interested. Period. Consumer behaviors haven’t changed these 100 years or so, only the delivery medium has. And therefore the analytics have too. Want the same proof that ads work in magazines who (as an industry) has a combined audience reach of a billion? Tell publishers to use Eye Capture.net. FB and Google don’t have environments where users are most open to laser targeted ads. Mags do. And EC can deliver laser targeted messages.

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  5. Michael Essany Saturday, June 30, 2012

    Yes, Twitter is nailing mobile advertising to a degree. But Twitter’s advertisers are the ones who deserve most of the credit, in my opinion. Twitter is such a clean-cut portal to reaching the masses that if an advertiser comes up with an effect, targeted, relevant message that easily resonates with its recipients, then a successful mobile ad campaign will be recorded in the history books, Regardless of the platform, the critical importance of messaging can’t be overlooked. There’s a great read from the team at Airpush about this subject – http://www.airpush.com/blog/redesigning-messaging-relevance-how-we-grew-to-2/

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