New feature for marketers
Earlier this month, Twitter (TWTR) announced its plans to expand its video ad features. Marketers can now play six-second pre-roll video ads before videos from various publishers on Twitter’s platform.
This new feature enables marketers to target video content as per the user type. For instance, marketers can now place ads specific to clothing videos for women under a specific age group. This would be possible with the use of Twitter’s data and technology.
It’s not necessary for marketers to have an existing relationship with these publishers. Some publishers that have received a heads-up for this trial include BuzzFeed, Vox Media, AOL, and Twenty-First Century Fox (FOXA).
According to a report from eMarketer, and as the above graph shows, the US online video advertising market is estimated at about $7.7 billion this year. Twitter aims to leverage this lucrative market and attract more users to watch videos on its platform.
Twitter is not advertisers’ first choice due to the huge popularity of Facebook (FB) and Google’s (GOOGL) YouTube. Both credit their dominance in the video advertising market to the number of users on their platforms.
How will Twitter charge for these ads?
Unlike Google and Facebook, Twitter will keep 30% of the revenue generated from these ads, and the remaining 70% will remain with content producers. Google and Facebook keep 45% of the revenue generated from ads placed on their platforms.
Facebook and Twitter are part of the Vanguard Information Technology ETF (VGT). They account for 4.0% and 0.31% of the ETF, respectively.