Twitter ad revenues to hit $1bn next year

Twitter is on course to hit global advertising revenues of $1 bn in 2014 and will earn $582.8m in 2013.

Twitter: ad revenues to hit $1bn
Twitter: ad revenues to hit $1bn

Significantly, it will be mobile advertising that will make up more than 50% of that figure, according to the a forecast from eMarketer.

Its new forecast predicts that about 53% of Twitter's ad revenue will come from mobile advertising this year alone. This is up from virtually zero ad revenue from mobile in 2011.

Last year, Twitter said mobile revenues were now surpassing web revenues on many days. EMarketer said advertising on mobile devices will be where Twitter sees the most incremental growth over the next two years.

With the $1bn ad revenue figure in its sites the study predicts that by 2015 Twitter will pull in around $1.33 b in worldwide ad revenue with more than 60% of that figure coming from mobile advertising.

Today is a big day for Twitter. It has launched its advertising API and that means significant changes both for Twitter and its advertisers. For the first time, marketers can now easily create and manage ad campaigns and buy them through third parties.

Significantly, it allows a major increase in scale for Twitter’s advertising business and its ability to generate revenues, which are expected to rise from $350m (£230m) last year, to around $1bn (£658m) by 2014.

The upward revision comes as more advertisers consider how they can use advertising on Twitter as part of their marketing activity and as its reach continues to improve.

This has become asier for marketers since the launch of Twitter's advertising API. It lets marketers create and manage ad campaigns, as well as buy them through third parties and has been called a game changer for Twitter advertising.

According to eMarketer, Twitter has benefited from the increased focus on mobile by competitors like Google and Facebook, which have both expanded their own mobile ad offerings and worked to convince advertisers to shift dollars to mobile devices.

Other factors helping to boost Twitter's ad revenue are what are being called the "native" nature of its advertising products and how the integration with the core user experience of the platform allows the company to deliver similar ads seamlessly across multiple devices at high volume.

That has also allowed Twitter to build its mobile advertising business quickly. To give a clearer indication of the speed of its ad business growth this year alone eMarketer estimates Twitter will earn $308.9m in mobile ad revenue in 2013. That is more than the company earned in total, from any advertising in 2012, when it made $138.4m from mobile ads.

The bulk of Twitter's ad revenue is expected to continue to come from the US – about 83% this year, down from 90% in 2012. By 2015, Twitter's continued expansion of foreign sales operations is expected to help non-US ad revenue reach $319m, up from just under $100m this year.