Twitter is trying to improve the advertisements with their latest purchase.
TechCrunch is reporting Twitter is acquiring TellApart, a commerce advertising tech firm. Twitter is effecting the change after announcing poor results from their first quarter earnings report. It is hoped that TellApart will help Twitter boost the quality of its commerce ads, and sell more of them. Twitter has also authorized the selling of their commerce ads through Google’s DoubleClick bid manager, so purchasers can centralize their buying capabilities.
One possible issue is that Twitter CEO Dick Costolo was an Angel Investor into Twitter back in 2010. He may have to distance himself from TellApart’s purchase to avoid any possible scenarios of impropriety. TellApart was once a partner with Facebook.
Other investors are SV Angel, Harrison Metal, and Greylock Partners. These investments have brought TellApart’s total value to $17.8 million dollars. TellApart creates social media ads for e-commerce retailers, and attaches possible sales to emails to potential customers.
Josh McFarland, TellApart’s co-founder and CEO, said “TellApart’s strengths in personalization, dynamic product ads, commerce data and with retail advertisers are strong complements to Twitter’s deep experience in mobile, understanding users and the app ecosystem.”
TellApart’s big year was 2013, when revenue exceeded $100 million. However, TellApart bet on Facebook’s FBX ad exchange, which Facebook no longer focuses on. It is expected that the acquisition by Twitter will make for a more symbiotic relationship.
According to Fortune, TellApart drives revenue totalling in the hundreds of millions for companies like Neiman Marcus, Brookstone, Pottery Barn, and eBags. The Twitter-TellApart deal should be completed by June 1.
TellApart is a specialist in personal predictive marketing. Its technology track internet browsing behavior and offers advertisements accordingly. TellApart works on a pay-for-performance model: it takes a percentage of the money advertising purchasing inspires. To that end, TellApart has made two purchases: Freshplum (e-commerce personalization) and AdStack (software for website testing).
Twitter feels that TellApart is simply a natural extension of the advertising software currently being used, but it offers an easier transition between users of desktop applications and those using mobile devices.
“Direct response advertising has been a major growth engine for our ads business over the last several quarters… We’re confident that TellApart will accelerate that trajectory further,” says Twitter senior vice president Kevin Weil.
Twitter did report advertising revenue sales of $388 million, which is 72 percent up year-over-year. Twitter’s total revenue was $436 million. Mobile sales accounts for more than 89 percent of Twitter’s total revenue.
[Image courtesy of AWS Amazon]