Twitter launches global retargeted ads product

Tailored audiences will use cookies to display promoted tweets to users who have visited a website

Technology trends and news by Steven Loeb
December 5, 2013
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(Updated to reflect comment from Twitter)

You know how sometimes you visit a website and then go onto a site like Facebook and you see an ad for that website you just visited? You know how that is kind of creepy and you feel vaguely unsettled, like someone is spying on you and can see everything you do? 

Get ready for the same thing to now happen to you on Twitter.

Twitter's retargeted ads product is now out of beta, and it is going global, the company announced in a blog post on Thursday.

The product, which is called "tailored audiences," was first revealed back in July. It relies on browser cookie IDs to retarget users on Twitter who have visited a website.

For example: If you visit a hotel website, say The Hilton, and are searching for hotels in Los Cabos, you may then see an ad while you're on Twitter in the form of a sponsored post talking about discounted night stays in Los Cabos. The users only see the ad, if The Hilton shares its browsing information, namely cookies, with Twitter through one of its ad partners.

Twitter has partnered with Adara, AdRoll, BlueKai, Chango, DataXu, Dstillery, Lotame, Quantcast, ValueClick and [x+1] to get the product off the ground. 

"With tailored audiences you can reach users on Twitter who have shown interest in your brand or your category even away from Twitter," Abhishek Shrivastava, Product Manager at Twitter, wrote.

"The end result is a highly relevant and useful message for the user. Advertisers will continue to receive the same reports that include how many users saw or clicked on an ad, without identifying who saw it or clicked on it."

It should also be noted that Twitter is well aware that some people may not be comfortable with this type of advertising, and so it has given users a way to opt out.  Users can simply uncheck the box next to “Promoted content” in their privacy settings, and Twitter will not match their account to information shared by our ads partners for tailoring ads.

It will also not get any information from users who have Do Not Track enabled on their browser.

The program has been in beta since July, and Twitter says that is has already been hugely successful for the advertisers who have been using it.

For example, HubSpot saw its engagement rates rise 45%, which Krossover saw its cost per customer acquisition decrease by 74%. Most impressively, New Relic saw 195% higher conversion rates targeting their website visitors.

As for how much advertisers are being charged to use the program, "The billing model for tailored audiences is the same as it is for any Promoted Tweets or Promoted Account campaign: cost per engagement (CPE) and cost per follow (CPF), respectively," a Twitter spokesperson told VatorNews. 

The success of the program is excellent news for Twitter, which is a company that relies almost exclusively on advertising for its revenue.

In the third quarter of 2013, advertising accounted for $153.4 million out of $168.6 million, or 91%, of Twitter's revenue. And that number is rising quickly. In the second quarter of the year it had roughly $121 million from advertising, for an increase of around 27% quarter to quarter.

And, despite Twitter making almost all of its money from this one sector, it also says that it expects even more of its revenue to come from advertising soon.

Since Twitter has almost no other way to make money, the fact that advertisers are seeing big gains from this latest product means it can breathe a little easier.

The retargeting market

There is a lot of money to be made in retargeted advertising.

The majority of retargeting now takes place on real time bidding exchanges, which are estimated to haul in $3.34 billion this year, according to eMarketer. 

It is estimated that only 18% of real time bidding impressions are sold without cookie data, so the market could be worth around $2.7 billion.

So its no wonder that Twitter wants a piece of that action. Or that there have been a bunch of start ups that cater to this market as well.

That includes ReTargeter, a full-service display advertising solution specializing in retargeting and audience targeting, and AdRoll, which just last year raised $15 million.

Other players in the space include FetchBack, which was acquired by GSI Commerce in 2010, and became eBay Enterprise; and Federated Media, which has raised over $50 million.

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