How does Twitter make money?


Quick Answer

The vast majority of Twitter’s revenues comes from selling advertisements. The micro-blogging network utilizes its massive user base to sell three types of targeted advertisements: promoted tweets, promoted accounts and promoted trends. In addition to advertising, Twitter makes money from various products and services, including self-serve ads in foreign markets, video ads on Vine (Twitter’s 6-second video app), data licensing, Amplify and MoPub.

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Full Answer

According to its financial records, Twitter’s advertising business made $277 million in revenue during the second quarter of 2014. The biggest driver of this revenue was promoted tweets. These short 140-character messages are purchased by marketers and delivered to targeted user timelines like a traditional tweet. Twitter utilizes an algorithm to deliver promoted tweets on the timelines of appropriate users. For instance, if a user is a fan of a particular retailer, Twitter delivers promoted tweets from the retailer to the user’s timeline.

Promoted accounts make up the second advertising format used by Twitter. Advertisers pay Twitter to promote their Twitter accounts as a means to gain more followers. Promoted accounts are placed in a user’s “Who to Follow” section based on the user’s preferences, Twitter activity and location.

The Promoted Trend model is also used by advertisers to gain a larger following. Advertisers pay Twitter to promote a trend or product to a targeted audience. When a user clicks on the trend, its search results are displayed in a timeline with a featured promoted tweet from the advertiser.

Twitter is constantly expanding and evolving by releasing new products and services. Additional revenue is secured by selling user data to analytics companies, developing custom-audience products and creating real-time bidding marketplaces for advertisements.

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