Ad Numbers Are Not in Twitter’s Favor

twitter_bird_arrows_kybdAs a follow-on to last week’s blog post about the future of Twitter, I spotted an interesting item in the Adotas newsletter today regarding Twitter’s anticipated ad revenue.

According to a new report from BIA/Kelsey, there is both good news and bad news. The good news is that revenues for social media advertising is expected to from from $2.1 billion in 2010 to $8.3 billion by 2015. The bad news for Twitter is that the majority of the cash is allocated for display advertising – $7.7 billion by 2015. Non-display revenue, like promoted Tweets and promoted accounts 0 will grow to $600 million in 2015. According to the report, non-display ads, like promoted Tweets, didn’t generate any revenue in 2011, although other sources peg Twitter’s 2010 earnings at $45 million.

According to Adotas, eMarketer predicted Twitter earning sof $150 million in 2011 and $250 million on 2012, which is very much in line with the BIA/Kelsey report. But these figures fall far short of Twitter’s promise. To quote from Adotas:

I can’t be the only one thinking, “That’s it?” But last week I commented that Twitter’s beta text ads would bring in incremental revenue at best — there is no Twitter ad product that promises exponential revenue growth, something that’s ever-more haunting since North American user growth stalled a while ago.

As Twitter’s valuation keeps skyrocketing, it’s getting tougher to turn a blind eye to these grim revenue estimates.

It will be interesting to watch this birdie as the business of social media evolves.

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