Twitter is a hot property among investors, who are pumping up the company's valuation, and the company hopes to tap the massive base of small and medium advertisers for ad-revenue growth. The attempt to harness small advertisers is also the latest move by Twitter to tap its base of more than 200 million registered users.
According to data in the Wall Street Journal, there're currently about 100 small advertisers using Twitter's "promoted" ad products. By contrast there're "125 big brands" using the site to market their products or services.
Several small advertisers said that their early experience with Twitter was "promising" and they expected to allocate part of their future ad budgets to the site. Not every early tester is convinced Twitter's ad program will be as effective as Google's AdWords. WSJ cites:
David Szetela, who holds the purse strings of numerous SMBs advertisers spent more money advertising the book on Google and Facebook than on Twitter over the past few weeks, he said the Twitter ads--which cost more than $4,000 in total--led to more preorders of the book. The orders were in the "high hundreds," he said, adding that Twitter's "ability to target so efficiently and interject advertisements into a social conversation is unique."
While Twitter has had some success in selling ads costing as high as $120,000 for a 24-hour period to brand names such as Coca-Cola Co., small businesses spend roughly the same amount as big brands in the $26 billion U.S. online-ad market, according to David Hallerman, an analyst at research firm eMarketer.
Twitter charges advertisers for each time a user selects an ad. Twitter's ad formats include Promoted Tweets--advertisements that look like regular tweets--as well as Promoted Trends, currently utilized by big-name advertisers, which allows a big brand to show an ad on a list of hot topics on Twitter's home page. It also offers Promoted Accounts, where a marketer pays to have Twitter recommend that users "follow" the tweets of a particular account.
A Twitter spokesman said ads are "a work in progress."