16 Mar Twitter Ads – Adding Value to Small Businesses?

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The recent reports of Twitter being valued at billions of dollars may have some of you scratching your heads.  The startup was valued at more than $4 billion in December but representatives of Twitter feel that it’s worth many billion more than that valuation.

The value of Twitter relies strictly on the potential and success of the social network’s plans for expanding its current advertising model for businesses.  In the past, Google AdWords has dominated the online advertising space for small to mid-level size companies and advertisers.  We are seeing the same trend develop with Facebook advertisements as it continues to increase its revenue streams, which continues to make it more valuable.

The key to success for both Google AdWords and Facebook ads are their adoption by those small to mid-level size advertisers.  As of right now, Twitter advertisements have catered to the big brand companies such as The Coca-Cola Company.

In a move to bring advertisers of all budgets to Twitter, the company hired Dick Costolo as the new CEO, replacing co-founder Evan Williams.  Costolo was brought on because of his past experience as a Google executive and has been charged with the task of making Twitter a business through ad sales.

Twitter generated $105 million in ad revenue during 2010 and experts predict that revenue will climb to $150 million in 2011.  The social network plans to roll out a self-service system this year that will allow smaller businesses to purchase ads on the network in a similar fashion as Google AdWords.  Advertisers will have to pay more for popular users similarly to keyword bidding.  The success of small businesses on Twitter will rely heavily on location-based advertisements.  Considering the adoption of Twitter on mobile devices, geo-based ads will play a huge role in the success for the small, local business.  As mentioned before, Twitter needs the small shops to jump on board like they did with Google Adwords for the past 10 years.

What do you think? Do you see Twitter Ads becoming the next trend and adding value to small, local businesses?

Sibet B Freides