Twitter ad revenue should near $1B next year, researcher says

Twitter's ad revenue is soaring, and a big reason for that is mobile, a market research firm said today.

eMarketer estimates Twitter will earn $582.8 million in global ad revenue this year, $950 million next year, and $1.33 billion in 2015. According to its boosted forecast, more than half of Twitter's ad revenue -- about 53 percent -- will come from mobile advertising this year, up from virtually no ad revenue from mobile in 2011.

And mobile is where Twitter will see the most growth over the next two years, eMarketer said. By 2015, more than 60 percent of Twitter's ad revenue should come from mobile.

The firm didn't change its estimates for Twitter's 2012 revenue, but "figures for future years have increased significantly to reflect the company's recent trajectory." eMarketer in September said Twitter would earn just over $800 million in 2014. It didn't make a projection for 2015 at that time.

"eMarketer believes Twitter has ultimately benefited from the increased focus on mobile by competitors like Google and Facebook, which have both expanded their own mobile ad offerings and worked to convince advertisers to shift dollars to mobile devices," the firm said.

The launch of Twitter's Ads API also will contribute to growth this year, though it had already built that product into its forecast. And the company also should benefit from making native apps. eMarketer noted the integration with the core user experience of the platform allows Twitter to deliver ads seamlessly across multiple devices at high volume. It also has allowed Twitter to build its mobile advertising business quickly.

eMarketer estimates Twitter will earn $308.9 million in mobile ad revenue in 2013, which is more than the company earned in total, from any ad type, in 2012. That year it made $138.4 million from mobile ads.

Meanwhile, Twitter will continue to generate most of its revenue in the U.S. -- 83 percent this year, down from 90 percent in 2012. By 2015, eMarketer believes only 76 percent of Twitter's ad revenue will come from the U.S.

Since Twitter's earliest days, one of the criticisms about the company's business model was that it wasn't built to generate significant revenue -- especially not enough to reward investors who have poured hundreds of millions of dollars into Twitter. But in recent years, the microblogging service has been bolstering its advertising business, and Twitter is now considered a bona fide advertising platform for a wide variety of companies.

The company has been bolstering that platform, adding things like Twitter Cards, and a much richer set of content -- photos, videos, article summaries, and more -- than it had when it was just a 140-character text-delivery mechanism. All of that is designed, in part at least, to give advertisers a better medium for creating rich messages. Indeed, some of the moves Twitter has made have been all about enhancing revenue.

The company last month unveiled its advertising API, which it hopes will make it easier for companies to create ad campaigns on Twitter.