Mashable reported yesterday that Twitter’s self-serve ad platform has gone live.
The interesting thing about this announcement for me is that it comes quite late in the day for Twitter. One has to ask the reason for that, and the possible answers are:
- They have raised so much money that they don’t care too much about revenues, or
- They weren’t convinced it would bring in a lot of money
I’m sure there were elements of both these points in Twitter’s decision making, but I’m guessing it is more about the latter. It is true that Twitter has raised a lot of money (including from DFJ) but they are still sensitive to valuation, and revenues are a key driver of valuation.
I think the truth of the matter is that self-service ad platforms only work when they are a no-brainer for advertisers – and that means on a platform with a very powerful brand and an easy to understand advertising proposition. Self-service ad platforms are targeted at small businesses and small business owners don’t have the time or understanding to be interested in anything else.
In Twitter’s case they have had the brand for a while, but the advertising products haven’t been simple.
My main reason in writing this post is that many consumer internet companies plan to build self-service ad platforms relatively early in their lives – i.e. before they meet the criteria of powerful brand and an easy to understand proposition. In the majority of cases they will be better off following Twitter’s example and waiting – even if that means finding an alternative way to drive revenues.