Twitter buys AdGrok to boost advertising

Promoted Products not doing as well as expected, expert group of advertisers to help

Financial trends and news by Ronny Kerr
May 31, 2011
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Twitter has acquired Internet advertising company AdGrok, according to a post published on the AdGrok blog on Tuesday. Terms of the deal were not disclosed.

As everybody suspected when rumor of the deal leaked, taking on AdGrok is all about improving Twitter’s Promoted Products:

When Twitter approached us and asked if we’d be interested in working on their monetization platform, we realized that this was a once-in-a-lifetime opportunity that we just couldn’t pass up. The fact that the Twitter team is both smart and user-focused only made our decision easier.

Up to now, AdGrok has sought to “make advertising simple” for anyone using Google AdWords. One of the company’s main products was the GrokBar, which offered all of AdWords’ functionality from a toolbar that could be pulled up alongside the client’s website. Other features included GrokBots and Grok-O-Matic, both of which helped clients improve their campaigns without constantly monitoring all the data themselves. Those who wanted a completely hands-off approach could even hire a Google Certified Professional to set up and manage the account on a daily basis.

Current clients of the service include Eventbrite, Kiva, Tutorspree, AppMakr and The Loop Loft.

In March, AdGrok completed raising $470,000 in angel funding from Chris Sacca, Russ Siegelman, Ben Narasin, TriplePoint Capital and Y Combinator, half a year after its YC Demo Day debut.

Two months later, they’ve been acquired. Not bad.

With AdGrok services ceasing by the end of June, the startup’s team will be working full-time on Twitter’s revenue engineering team. As if we needed any more indication, this is a sure sign that investors are putting the heat on Twitter to do a better job of monetizing its platform. The latest estimates from eMarketer said the company pulled in $45 million in ad revenue last year, with $150 million expected this year.

Those are just estimates, however. And even if AdGrok does help Twitter meet those expectations, shouldn’t the social media darling second only to Facebook be doing better than that?

For current AdGrok users, here’s the company’s official statement on the future of the service:

We are no longer accepting new customers and will cease charging our existing users immediately. We will shut down our servers on June 30th, after which the GrokBar will not be available. Uninstalling the GrokBar is easy:

On June 30th, we will also unlink all customers from the AdGrok Google accounts and securely delete our databases. Performance data and campaign structures from AdGrok customers will not be shared with Twitter.

Please note that performance data and campaign structures from the campaigns you have run through AdGrok will not be affected by the shutdown of our servers; this information will continue to be accessible through your Google AdWords and Google Analytics accounts.

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