Twitter finds footing in advertising, projected to generate $1 billion in revenue in 2014

Twitter payola

Despite earlier forecasts that Twitter would generate over $1 billion in revenue by 2016, a new report by Bloomberg reveals that according to its source, Twitter is expected to rake in over $1 billion much earlier — 2014. If the rumors are true, Twitter has been a hit among advertisers and its days of hunting for revenue are over.

Until Twitter acknowledges the forecast, the forecast remains only a rumor, but it’s a plausible figure. In 2011, Twitter generated $139.5 million in revenue, much of it due to adverting. That’s a far cry from $1 billion in a matter of three years, but the company has been particularly aggressive in 2012 with the promotion of its advertising business.

Following in Facebook’s footsteps, Twitter recently introduced a beta release of its self-serve advertising program for small businesses, and followed up this move with two strategic hires to head up its expansion into international advertising. The new hires are ex-Google employees, Shailesh Rao, who serves as Twitter’s vice president of international revenue, and Stephen McIntyre, its director of international and online sales and operations.

Twitter’s international efforts could significantly contribute to it advertising revenue in the near future, but its small business advertising program is in its infant stages and was released to only a select number of merchants. The small business program has had little to do with its performance to date.

Instead, much of its advertising revenue should be attributed to its crucial corporate partnerships with companies including ESPN, American Express, and more recently, its music-inspired brand partnership with Pepsi. You may have noticed the promoted Pepsi hash tags and Pepsi’s integration of Twitter’s real-time data to create original Web programming on the latest Twitter trending artists.

Now six years old, Twitter’s 2012 revenue is likely to pale in comparison to Facebook’s multi-billion dollar display ad revenue and Google’s $10 billion ad revenue in 2011 alone. To put Twitter’s competitor’s performance into perspective, according to Bloomberg, Facebook took six years to generate its first $1 billion in yearly revenue, while Google made its first $1 billion in five years.

But credit should be given where it’s deserved. At its #Twitter4Brands event in New York City, a presentation to promote Twitter’s suite of advertising offerings, Twitter revealed the following impressive statistics:

• Twitter has more than 140 million active users.

• 55 percent of users access Twitter on mobile, with 40 percent growth quarter over quarter.

• Twitter users create over one billion Tweets every three days.

• 60 percent of Twitter users tweet; 100 percent are listening.

• 79 percent of people follow brands to get access to exclusive content.

• During this year’s Super Bowl, one in five commercials contained a hashtag.

• Promoted Tweets get an average engagement rate of one to three percent.

The micro-blogging platform is a far cry from its older self, when the company was offering enterprise suites and analytics, before realizing that the bigger bang for the buck was in advertising. Twitter has found its groove, and while its advertising programs are in its early stages, it’s beginning to establish itself as a crucial platform for businesses.