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Twitter IPO Means Ad Changes Likely Around the Corner

Published onOct 01, 2013
Twitter IPO Means Ad Changes Likely Around the Corner

It doesn’t take an expert in the world of online media business to know that profits are all about the ads. Whether you are on YouTube, Facebook, LinkedIn, or Twitter, the money being made is based on your eyes. And there are plenty of ads designed to get your attention every step of your Internet experience.

What that translates to for the user, however, is often an experience that is more frustrating than pleasant. If you can remember the days before YouTube placed ads on what feels like every video, then you can certainly relate.

In the old days, companies desperately found ways to “go viral” to get attention on YouTube. But now, ads built into the video make this less of a concern for companies and more of a bother for the everyday user.

With Twitter’s announcement that it is making an IPO (initial public offering), everyone is speculating how Twitter’s ad style might change. Twitter is known for its especially simple and unobtrusive style of ads, compared to other sites. However, with about half a million dollars in profits expected this year, and a billion dollars next year, Twitter will no doubt make some changes to increase its revenue as it explodes in size and introduces itself officially to the public.

Of course the user information that Twitter gathers is also a goldmine that Twitter can take advantage of, though it hasn’t yet. Just like Facebook, Twitter provides advertisers with valuable information about what Twitter users like, what they think of new products, and what they want. And especially with websites like Twitter, that have apps on smartphones, users can see these ads all day long. With 2% of the global mobile-ad sales, and doubling every year, Twitter could soon be a major ad contender for your eyes while on the daily commute. For advertisers, Twitter could become the next big thing in ad sales.

For those like Ron Swanson, the character in the NBC comedy Parks and Recreation, this barrage of personalized ads might feel like an invasion of privacy. Some users have responded with software that blocks the ads that advertisers have paid good money for the users to see.

When it comes to online ads, companies have to remember that it is a balancing act between creating enough revenue and keeping the users from feeling as though they are wading through a sea of ads every time they try to use the website. This balance will keep savvy users from blocking ads and will encourage them to remain loyal to Twitter, instead of jumping to the next big thing.

The future of Twitter will definitely depend on how those in charge decide to handle the next couple of years after going public. A light touch could make all the difference in the long run. Though Twitter users, like YouTube users, could be so invested in the site, that they will ultimately swallow their complaints and wade through the ads.

* John Hodnette is a second year law student at Wake Forest University School of Law. He holds a Bachelor of Arts in English, with a minor in Philosophy, from Auburn University. Upon graduation, he intends to practice in the Chicago area.

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