With advertising in flux, Twitter is outsourcing ad monetization to ad tech
Twitter’s beleaguered ads business is on a bit of a roll these days.
With the appointment of a top media executive — Linda Yaccarino — as the new CEO, the company is making a statement. Even the largest media buyer, GroupM, which had previously determined the platform to be a “high risk” buy, has taken notice and tried to calm advertisers’ concerns about the social network. Meanwhile, the ads team, despite encountering obstacles, are persevering. In fact, they recently struck a deal with an ad tech vendor that could help counteract the ongoing loss of ad revenue from the platform.
Since May 13, Twitter has been selling ad inventory through the mobile advertising marketplace Inmobi. This exclusive arrangement is evident in Twitter’s ads.txt file, which authorizes Inmobi as the sole vendor for this purpose.
Currently, this partnership is limited to one test market, according to an ad executive familiar with the situation. However, as is customary with such deals, the plan is to gradually expand into additional markets over time.
Should this happen then it could potentially make it easier for ad dollars to flow back into the business following a prolonged, Elon Musk-induced drought.
To understand why, here’s the rundown on an ad tech vendor like Inmobi: it’s one of the world’s largest mobile ad marketplaces. That means marketers bid in real-time on people using mobile devices through the tech Inmobi owns. And they do this billions of times a day.
Given this, it’s not difficult to see why a social network that neither has the demand for its ads or enough internal expertise to stoke it would turn to a business like Inmobi.
“It’s almost like Twitter doesn’t really have a choice but to go down the ad tech route because they need to explore every avenue they can to fortify that ad revenue stream following the changes made to policies and content moderation as well as the loss of personnel,” said Evelyn Mitchell, a senior analyst for digital advertising and media at eMarketer.
Twitter’s foray into programmatic advertising is the latest twist in an intricate narrative surrounding its ads business.
Until now, Twitter has never made ad inventory available to advertisers via the open marketplace, where prices are decided in real-time through an auction.
Instead, it sold its ad inventory through the ad exchange (read programmatic marketplace) MoPub it bought in 2013, and those ads could only be purchased from another piece of ad tech its owner called TapCommerce.
Basically, it was a closed market, just like other walled gardens. But the Inmobi deal suggests a potential shift. Now, Twitter is selling ads (albeit a small portion for now) through a marketplace it doesn’t own, targeting advertisers it doesn’t directly work with. This kind of move is effective when done at a large scale, so it wouldn’t make sense to stop at just one market. Twitter seems to understand this too. Scale was a crucial aspect its ad execs sought in a programmatic partner from the beginning, said the source. They wanted a partner with global expertise in in-app advertising worldwide, the source continued.
Inmobi declined to comment.
After several months of stagnation and ambiguity, Twitter’s ads business seems to be experiencing some movement. However, it remains questionable whether these recent developments signify genuine progress or simply from a state of inactivity. The future will reveal whether Twitter can successfully persuade advertisers to engage and participate in this endeavor..
“What I worry about with Twitter is there is a perception by some advertisers that open exchange programmatic inventory is lower quality,” said Mitchell.
More in Marketing
TikTok has officially launched its new e-commerce platform, TikTok Shop, earlier this month on August 1. Using the new e-commerce platform, brands and creators can sell products directly on the platform, potentially creating new revenue streams, and tap into the short-form video platform’s growing popularity.
‘The influencer industry can be really vile’: Confessions of an influencer marketer on the industry’s unfair hiring practices
While the influencer industry might sound exciting and like it’s full of opportunities, one marketer can vouch for the horrific scenarios that still take place behind the scenes.
After a tumultuous 12 months, marketers are getting a clear picture of how they really did during a time of true uncertainty. And, as it turns out, it wasn’t all that bad.
Ad position: web_bfu