As Twitter continues its inevitable path towards IPO -- expected to happen in the next year or so --predictions of advertising spending on Twitter for this year will undoubtedly help its initial share price.
According to online marketing researcher eMarketer, Twitter will earn US$ 582.8 million in revenues this year, before hitting close to the magical US$ 1 billion mark next year.
While the estimates themselves are impressive, the fact that it comes from the closely watched eMarketer research group is also significant, as the predictions will surely push Twitter up the list of investors’ "ones to watch" over the next 12 months.
While there may be some raised eyebrows over the spend on advertising predicted here, we have already seen this week that spending on advertising is on the rise with evidence that mobile paid search spend has doubled in the past 12 months alone.
Indeed, Twitter is likely to make up over half of its ad revenues (53%) from mobile advertising, an astounding figure, in light of the fact that in 2011 it had virtually no mobile advertising, eMarketer says.
Twitter Ad Revenues
And this growth is set to continue, with ad revenues of US$ 1.33 billion predicted for 2015, of which at least 60% is likely to be from mobile.
According to eMarketer, this comes as advertisers are increasingly open to spending money on mobile advertisements, while the reach of Twitter is said to be expanding -- again according to research from eMarketer. Twitter’s rise in the mobile space, the research says, is related to the focus on mobile by other social business giants like Google or Facebook who have been pumping money into nudging advertisers towards mobile.
This will be facilitated and encouraged by the launch of Twitter’s Ads API, which will push growth this year, even if the growth that is expected to come from that has already been written into revenue predictions.
Twitter Outside US
It also seems that the world outside of the US is catching onto the idea of advertising and Twitter, even if the vast major of Twitter ad revenues will still come from the US.
The research says that this year 83% of revenues will come from the US, as opposed to 90% last year. While its expansion outside of the US is expected to push non-US revenues to US$ 319 million from around US$ 100 million expected this year.
The bulk of Twitter's ad revenue is expected to continue to come from the US -- about 83% this year, down from 90% in 2012. By 2015, Twitter’s continued expansion of foreign sales operations is expected to help non-US ad revenue reach US$ 319 million, up from just under US$ 100 million this year.