Twitter Jumps To Advertising Space, Begins Self-Serve Advertising For Small Businesses

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Twitter has formally launched a service to allow small businesses to buy and place ads on the online messaging platform. Small businesses will be able to buy ads on Twitter  through an automated system starting in March. Officially launched on Twitter’s website, the new service is limited to merchants and advertisers who use American Express cards. Twitter will open the service to other cardholders in the coming months.

The move could give the San Francisco Internet company a big boost in its effort to make more money and compete with Google and Facebook  for digital advertising dollars. The automated system is like Google’s. Advertisers will decide how much they want to spend on ads and where they want the ads to appear, and they’ll write their own messages no longer than 140 characters. Twitter charges advertisers when the ad gets a response, such as a user following the advertiser, retweeting the message or clicking on a link.

Since 2010, Twitter’s in-house sales staff has sold “promoted tweets” to large businesses on a case-by-case basis. The company spent last year developing a self-serve system that could handle a far greater volume of ad transactions and, in November, opened the system to a small number of clients for testing. The rollout comes at a critical phase in the company’s development and will be closely observed by investors and analysts curious to see if the company will go public anytime soon.

Last year Twitter generated about $140 million in advertising revenue, according to research firm EMarketer. This year, Twitter should pull in $260 million — nearly twice as much — in part because of this new self-service system, EMarketer predicts. Twitter, like Facebook, has taken its time in rolling out ads to avoid annoying or alienating users. It started selling ads for the first time nearly two years ago. Even as Facebook prepares for a multibillion-dollar initial public offering, Twitter — which has a lofty valuation of $8.4 billion — has deflected questions about when it plans to sell its stock to the public.

Twitter Chief Executive Dick Costolo told CNBC that small businesses have been “banging down the door,” begging to buy ads.

Good platform for advertisers to sell their wares!

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