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4-Traders Homepage  >  Equities  >  Euronext Amsterdam  >  HEINEKEN    HEIA   NL0000009165

HEINEKEN (HEIA)

Delayed Quote. Delayed  - 05/27 05:35:18 pm
83.86 EUR   -0.06%
05/02DJTwitter Looks to Video to Increase Advertising Sales
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Twitter Looks to Video to Increase Advertising Sales

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05/02/2016 | 02:46am CEST

For years, Twitter Inc. has struggled with its Main Street appeal. Now the social-media service also may be losing its Madison Avenue allure.

Twitter last week badly missed its first-quarter revenue estimates, attributing the shortfall to big-brand advertisers not increasing their spending as quickly as expected.

The news was particularly unsettling for Twitter investors. Amid a list of issues that include stagnant user growth, management turnover and a muddled product strategy, deep-pocketed brand advertisers have been a reliable source of cash. Twitter's revenue growth is expected to shrink to as little as 17% this quarter after doubling only 18 months ago.

The culprit appears to be Twitter's signature ad product: the "promoted tweet," which looks like a regular tweet but includes promotional text, images and links. Brands are moving away from these ads because they are looking for more immersive advertising such as video or interactive ads, said James Douglas, executive director of a social-media agency owned by Interpublic Group.

On the video front, Alphabet Inc.'s YouTube accounts for the largest share of U.S. video ad dollars at 20%, according to eMarketer. But Facebook, which started video ads in 2013, is gaining steam. The social network on Wednesday said ad revenue jumped 57% in the first quarter, specifically noting videos created by advertisers as the driver.

"People are sharing and creating nearly three times more video on Facebook than they were a year ago?This presents a big opportunity for marketers," said Facebook operating chief Sheryl Sandberg.

Twitter, too, is betting that video will become its next cash cow.

The company launched video ads last year that start rolling while muted as users scroll through their timelines. The company said advertisers are waiting for Twitter to roll out improved tools to target users and measure performance. Twitter expects to release those tools in the fall, around the time it will begin live-streaming the first of 10 National Football League games.

Under the new NFL deal, Twitter will receive 15 ad slots to sell commercials during each game. On Tuesday, Twitter said it already signed up one major marketer to advertise during the livestream. But for now, many advertisers and agencies say they are looking elsewhere to park their video dollars.

Twitter is "not yet at the forefront of the video content conversation and that is where the dollars are," said Shelby Saville, president of innovation and investment platforms at Mediavest Spark, an ad-buying firm that works on behalf of companies such as Morgan Stanley and ConAgra Foods Inc. She pointed to YouTube, Facebook and Snapchat as places that advertisers are gravitating to for video ads.

A Twitter spokesman declined to comment beyond the company's statements during earnings results last Tuesday.

Ramping up its push into video is critical for Twitter. Digital-video ad spending in the U.S. is expected to grow 28.5% this year to $9.84 billion, according to eMarketer. Twitter faces an onslaught of competition in the rush for video ad dollars because most media companies, publishers and social media platforms also are gunning for those dollars.

Coldwell Banker Real Estate LLC bought Twitter's promoted video ads last year, but users didn't "engage" (view, share or comment) with the ads enough to justify the cost of the marketing effort, said Sean Blakenship, Coldwell's chief marketing officer. He said Facebook's video ads outperformed the Twitter spots.

Marketers are willing to pay more for ads on Facebook in exchange for access to the company's 1.65 billion users and more sophisticated set of targeting and measurement options.

According to AdParlor, a social-media ad buyer that specializes in brand advertisers, ads on Facebook cost an average of $5.25 per 1,000 impressions in the U.S., compared with $4.78 on Twitter and $3.36 on Facebook's Instagram in the first quarter.

Some marketers say they are seeing their investment in advertising on Twitter pay off and expect to spend more on the platform this year.

"We're getting tremendous engagement there, and for us we have yet to see a competitor for Twitter in the area of making connections during cultural moments," said Lou Paskalis, senior vice president and enterprise media executive at Bank of America Corp.

But some of Twitter's big? advertisers have pulled back on its traditional ads.

Beer maker ?Heineken NV, a frequent advertiser on Twitter, said it has successfully used promoted tweets and Twitter's short-video ads to boost its marketing efforts surrounding live events? ?such ?as European soccer, music festivals and other sponsorships. Still, the brewer expects to spend slightly ?less on Twitter this year than it did last year.

"You don't want to tweet everything," said Ron Amram, vice president of media for Heineken USA. "We are experimenting a bit less and waiting for video."

Write to Suzanne Vranica at suzanne.vranica@wsj.com and Yoree Koh at yoree.koh@wsj.com

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