According to a recent eMarketer report, Twitter’s 2011 advertising revenues will fall short of the earlier $150 million projection. However, when compared to Twitter’s $45 million of revenue in 2010, the revised 2011 projected revenues of $139.5 million represent a growth rate of 210%.
The primary reason Twitter will not meet the $150 million projection is a delay in rolling out a “self-serve” ad platform. Debra Aho Williamson, an eMarketer analyst, said the following of the “self-serve” platform’s role in Twitter’s revenue growth:
“Twitter is looking to compete for the same advertisers that made Google and Facebook’s self-serve advertising platforms smash hits. Self-serve advertising accounts for about 60% of Facebook’s ad revenue—that’s a pinnacle Twitter will hope to reach as well.”
While the revised 2011 revenue projection shows decreased revenues, the report provided positive news as well. It predicted that Twitter would reach annual revenues of over $400 million by the year 2013. In addition, the report stated that Twitter had been able to produce better advertisement engagement than some of its competition.
Twitter will look to draw new advertisers to the program with new features and continue leveraging its user base that includes celebrities, politicians, and journalists. Recently, Twitter announced that they would display promoted tweets at the top of timelines whether or not the Twitter user “follows” the advertiser. In addition, one week ago, Twitter launched its new political advertisement program, which is likely to produce substantial revenues during the 2012 election cycle.
While increasing revenues is a major focus, Twitter has stated on multiple occasions that the user experience is paramount. As Twitter looks for ways to increase revenue and meet projections, they will simultaneously attempt to preserve the simple nature of the micro-blogging service and keep users engaged.
Twitter recently raised $400 million of Series G funding on an $8 billion dollar valuation and is expected to continue steady user and revenue growth moving forward.
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