Twitter is in the middle of a major development cycle that will culminate with a series of new features, design changes and ad products. There are multiple objectives at play, but Twitter's most pressing needs -- increased user engagement and ad revenue -- are driving almost every move the company will make for the foreseeable future.
Advertisers that have been anxiously waiting for new ad products from Twitter got their first preview last week in the form of mobile app ads, a format that's been successful for Facebook of late. The mobile app promotion suite, which is still being tested in private beta, combines Twitter Cards and Promoted Tweets to encourage users to install new apps or re-engage with apps that may be languishing on their mobile device.
Ads for mobile apps are an obvious next step for Twitter. While Facebook hasn't broken down how much revenue it generates from these ads, there's no question the format played an important role in Facebook's rapid ascent on mobile.
"I think ecommerce will either be big for Twitter or Twitter will not be successful at advertising." -- Bob Buch, SocialWire
Twitter is expected to widen the offering over the coming months, but in the meantime users are already seeing mobile app ads from some of its early beta partners such as Spotify, HotelTonight, Kabam, Deezer and SeatGeek.
MoPub Rises to the Surface
Twitter also announced a deeper integration with MoPub, the mobile ad exchange it acquired last October, which gives advertisers the opportunity to run marketing campaigns on and offTwitter. The new interface now enables advertisers to run simultaneous campaigns on Twitter and MoPub at much greater scale. MoPub's exchange reaches more than 1 billion mobile devices and fulfills more than 130 billion ad requests inside Android and iOS apps every month.
[Related: Twitter buys MoPub, a mobile-focused ad exchange]
MoPub gives Twitter the scale it desperately needs for mobile advertising. So in a roundabout way Twitter can now claim an audience reach that approaches that of Facebook. Of course, Facebook is testing ways to sell mobile app install ads outside of Facebook as well.
"Twitter has always been pretty aggressive in testing out new ideas and especially on the advertising side," says Nate Elliott, vice president and principal analyst at Forrester. "I think this is something that's been brewing for quite a while."
Still, Twitter's approach to advertising and the overall user experience of the product has been much slower and deliberate than Facebook's. While Facebook made dozens of ad products available to marketers before culling its offering in an attempt to remove unnecessary confusion for marketers, Twitter has been testing its innovations more thoroughly, says Elliott.
"Twitter is much more deliberate and takes much more care in the rollout of its ad products," Elliott says. However, he says he's not sure that either company has struck the right balance yet.
Twitter's Future Depends on Ecommerce
SocialWire CEO Bob Buch says Twitter's success will largely depend on its capability to make waves and gain traction in ecommerce. "I think ecommerce will either be big for Twitter or Twitter will not be successful at advertising," he says.
[Related: Tweets About TV Programs Prove Twitter's Earned Media Value]
"It's a must have. What marketing platform online has been successful without a large chunk of their advertising revenue coming from direct response? That's what marketers use the Internet for," Buch says.
"Facebook surrounds marketers in metrics that don't mean anything. I really hope Twitter doesn't make Facebook's mistake here." -- Nate Elliott, Forrester
With new products and features in its pipeline, Buch says he's confident that Twitter is on a clear path to turn around its ecommerce business.
"I am still bullish on Twitter," he says, calling the platform unique for its capability to drive users in to stores in real-time. "I think there's a huge opportunity there ... The key complaint that marketers have is the lack of targeting. Their targeting has not been as good as Facebook's but that's going to fundamentally change."
Oddly enough, for Twitter to attract more revenue from retailers and consumer packaged goods brands it has to encourage users to jump off the platform in a way. "All you want is someone to get to your site as fast as possible and buy stuff," says Buch.
Twitter is expected to introduce a series of other ad products. Indeed, some reports suggest the company is readying as many as 15 units to be released before the fall.
"I wouldn't be surprised if they have a dozen ad products in ad testing right now," says Elliott of Forrester. "I'd be surprised if they roll all those out."
[Related: Twitter Doubles Revenue but Profit Remains Elusive]
New ad units are well and good, but Elliott is also holding out hope for better metrics from Twitter. "Facebook surrounds marketers in metrics that don't mean anything," Elliott says. "I really hope Twitter doesn't make Facebook's mistake here."
Twitter on the Cusp of a New User Experience
While innovations on the advertising front abound, Twitter's platform and the experience it provides users are both long overdue for a refresh. A limited pool of users are already seeing what Twitter has in mind, assuming plans don't change before a wider rollout.
Under the current framework, user profiles are going the way of Facebook with richer media and full bios appearing in a single screen. The new design will also impact timelines by putting less focus on the traditional chronological feed. Tweets and other media will be spread across the page in a more complex presentation that mirrors newer services like Pinterest.
While the redesign hasn't been pushed to all of Twitter's 241 million users yet, other new features like uploading multiple photos in a single tweet and tagging other users in photos have been released in the meantime.
In an industry where copycatting has become prevalent and almost expected it's no wonder why Twitter is following Facebook's lead on user experience design. Elliott applauds Twitter's determination to create a more compelling platform for users, but says it also has an opportunity to break new ground for marketers. Following Facebook's advertising model too closely would be a mistake, he adds.
"The reality is that Twitter is still in an earlier stage in terms of building out a service and building out an ad offering," Elliott says. "Twitter still has a long way to go in encouraging users and marketers."
Read more about advertising in CIO's Advertising Drilldown.
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