What: Twitter has just purchased mobile ad startup MoPub, reportedly for $350 million in stock.
Why is it important: This strategic move will grant Twitter a significant advantage in building its mobile-focused advertising business, because MoPub’s technology will allow it to target advertising better than any other social media player, even Facebook.
Apple’s new iPhone devices update may have outshined the news, but earlier this week Twitter welcomed mobile-focused advertising exchange MoPub to its ranks.
According to Twitter‘s blog post on the topic, MoPub’s technology lets mobile application publishers manage their inventory and optimize multiple sources of advertising –direct ads, house ads, ad network, real-time bidding– in a single product. In Twitter’s own terms, they expect “to extend many types of native advertising across the mobile ecosystem through the MoPub exchange”.
MoPub was created three years ago to enable content by powering advertising for the world’s mobile publishers, thus developing a new ads economy in mobile. Since then, their team has grown to nearly one hundred employees worldwide, and their platform has expanded to serve billions of mobile ads every month around the world, on behalf of their publishers. On Monday, September 9, MoPub was officially acquired by Twitter.
Although the purchase price was not disclosed, TechCrunch reported the number could be as high as $350 million in stock.
Actually, Twitter has built a very efficient mobile advertising system that generates significant revenues, but still, the MoPub deal will help it to further develop this area, placing Twitter ahead of any other social media player –Facebook included– in the targeted-advertising race.
As reported by Gigaom’s Mathew Ingram, AdGrok’s founder Antonio Garcia, who is also the creator of Facebook’s real-time ad exchange, explained that “when a user is logged into Twitter on both desktop and a mobile device –since the browser cookie from the computer and the mobile device ID are joined–, the service will be able to combine what they know about that person’s activity in order to make better guesses about what ads to show them”.
Garcia also said that the obvious result will be higher prices for ads in which Twitter is involved, because there will be a more interesting value for advertisers. The only concerns that come to mind are the same ones that prevented Facebook from getting there first: privacy and identity.