On Monday Twitter Inc. (NYSE: TWTR) announced that it is in the process of purchasing TapCommerce Inc, a startup specializing in mobile ad and targeting.
Although neither company revealed the terms of the deal, inside sources revealed that Twitter paid about $100 million for the New York based startup.
TapCommerce is a startup that focuses on getting users to “re-discover” and “re-engage” with apps they installed in the past. App developers send a large amount of money to market their apps so that new users download them. But re-engaging users offers a different approach to get revenue and return on their investment. TapCommerce provides the ability for marketers to target their advertisements based on the users’ previous interaction and usage of the app.
This system is especially useful for retail apps or apps that sell services, such as travel or mobile gaming.
This technique is by no means a new method – it has been used extensively in desktop advertising, but has not yet found ubiquity on mobile due to the lack of cookies.
TapCommerce tracks the steps consumers take in one app, and then show them relevant ads in other apps. For example, if a consumer looked at a widescreen TV in retail app, but then closed the app without buying, TapCommerce will show the consumer an ad of the same television when he is viewing a different app.
Additionally, Twitter has announced mobile app-install ads. These ads appear along with Twitter’s newsfeed. They display ads that ask viewers to download or use a mobile ad and include links to stores run by Apple Inc. or Google Inc. These app-install ads are especially popular among game developers and online service providers.
These app-install ads are crucial for app developers to get their app noticed through the clutter of options in the app store. Twitter provides advertisers the option to target users based on several criteria, including keywords, interests, and tailored audiences. Advertisers will also have the option to pay based on how many users install the app, purchase the app, or click on the advertisement to the app.
Both these new developments are likely to be profitable ventures for Twitter, who is struggling to bring in revenue as its user growth slows. Facebook, on the other hand, is surging ahead of Twitter, due to its own mobile app-install ads. These ads have been a strong force behind Facebook’s success, and constituted 59% of the social media giant’s revenue in the first quarter.
Facebook’s app-install ads are so successful because the plethora of data Facebook has about each user. It allows advertisers to target ads based on age, gender, location, and even interests. Twitter will need to prove that they have just as much to offer advertisers if it is to ever hope to compete with Facebook’s mobile ad business.
