Twitter buys AdGrok to boost advertising

Ronny Kerr · May 31, 2011 · Short URL: https://vator.tv/n/1b03

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

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: https://adgrok.com/help#uninstall

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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What is Twitter?

Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests. 

Where did the idea for Twitter come from?

Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.

How is Twitter built?

Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes. 

We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.

How do you make money from Twitter?

There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.

In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet. 

At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.

Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.

 

What's next for Twitter?

We continue to focus on building a product that provides value for users. 

We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.

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