On Friday, Twitter announced the Kiwi launch of Twitter Ads, a self-serve ad platform that aims to provide advertising options for small and medium-sized businesses.
“We’re launching the self-serve ad platform primarily for small to medium-sized businesses to be able to advertise on Twitter for the first time in New Zealand,” says Nick Bowditch, the small business evangelist at Twitter Australia.
“Starting from [Friday, 7 November,] anyone that has a Twitter account can go to ads.twitter.com and start advertising to boost their brand awareness and also get more traction for their content. [And this means that] any Tweets or anything that they believe in, they could get out to a wider audience.”
Twitter Ads has already been launched in 21 international markets, and it will almost certainly come as a welcome marketing tool to smaller businesses that have thus far been precluded from using Twitter’s advertising services due to the minimum spend threshold that the company previously set.
Bowditch explains that in the past, higher spending advertisers were able to advertise on Twitter through a representative on the ground in New Zealand. Due to their leaner budgets, smaller businesses have thus not been able to use Twitter’s advertising solutions.
“We’ve always worked with the bigger corporate spenders as well, and by creating a self-serve ad platform it just gives them the opportunity of accessing the same functionality and success potential with a smaller spend,” Bowditch says. “And because we don’t have a minimum spend requirement, it just means that it’s accessible to everyone and a lot of different people can give it a go.”
In much the same way that telcos offer different service options to businesses across the spectrum, so too is Twitter now diversifying its advertising options. But by introducing the more affordable option, it creates the risk that some high spending clients might be tempted to shift across to the cheaper options.
Bowditch says that the company is, however, confident that this will not happen on account of the services being quite different.
“The larger advertisers actually get some support [from Twitter],” says Bowditch. “[And] when it comes to forming campaigns, they get advice on brand strategy. So for those bigger spenders there is more support given, whereas the SMB offering is very much a self-serve platform.”
He says that high spending advertisers are essentially appointed a Twitter account manager, who provides support while campaigns are running.
“Nothing is going to change for the bigger spenders. The support those guys get will be exactly the same … It’s very much business as usual for them.”
And rather than losing higher spenders to the cheaper alternative, Bowditch says that since launching platform three weeks ago in Australia, Twitter has actually seen an influx of larger medium-sized businesses, which were previously unwilling to spend sufficiently to meet the threshold.
Should these clients see strong results from using the self-serve option, then it wouldn’t be far-fetched to imagine them increasing their spend to take full advantage of the platform—something which would favour Twitter as well.
And the businesses that are experimenting with the self-serve platform are learning about some of the advantages that come with it.
Bowditch explains that the crux of the advertising platform is to ensure that an advertiser’s commercial messaging reaches a broader target base.
“Normally, [a tweet] would only reach the people that follow them—and this could be a very small following,” says Bowditch. “So, in this way, they can spray their message to a bigger audience or to more users.”
But it isn’t only expanded reach that Twitter is now offering to customers. The company has also incorporated a range of campaign tracking tools that customers can use to gauge the success of their promotional efforts.
Bowditch says: “The tracking and the recording, and the metrics you can get from a Twitter campaign will let people monitor and judge the success of their advertising campaign in real time. And it can also help them plan for future ad campaigns … This, again, is something that small businesses have never really had access to.”
In addition to increasing the reach of a message and tracking how successfully it has reached the target audience, the platform will also enable users to set budgets for their Twitter-based campaigns.
This means that users will be able to set both a daily and total budget—no matter how small—and the campaign will end automatically once that budget has been reached.
How much the users can do with their budgets will largely be determined by how competitive the market is for a specific audience. Twitter Ads works on an auction model, which means that users bid on the ability to access a particular target audience. If the demand for a certain target market is high, then this will in turn push up the price of the space as advertisers vie against each other.
Bowditch says that since last week’s launch Twitter has been spreading the message about what the platform offers.
“We’ve done direct mail, and we’ve done some promoted tweets. And we’re also having conversations with the media and trying to get the word out there. And we’re also hoping to get some organic reach through tweets from businesses that have had some success with it.”
The New Zealand launch of Twitter Ads was followed by similar releases in Singapore, Norway, Finland and Denmark, and this will serve to increase the social media site’s global revenue in the small to medium-sized busines market.
Interestingly, despite its size and success, and like many tech start-ups, Twitter is still not profitable. According to the company’s Q3 financial results for 2014, Twitter made more than US$361 million in revenue over the three-month period running to 30 September, but it was still in the red by US$175 million.
(Graph credit: The Verge) But despite this drop, it is worth noting that Twitter’s advertising revenue is increasing markedly. The latest stats found that Twitter now makes US$1.77 for every 1,000 timeline views. This is up significantly from the US$1.60 posted in the second quarter and a mammoth 83 percent jump from what it was at the same time the previous year.
And by extending the reach of initiatives such as Twitter Ads, the company aims to further increase its international advertising revenue. But there are no guarantees in the digital world, and whether this growth eventually manifests as profitability is anyone's guess.