Twitter Debuts Trial of Video-Advertising Service

Twitter Inc. (TWTR) is introducing video advertisements, seeking to broaden its revenue sources after finding that clips embedded in tweets are effective at drawing attention and interaction from users.

The trial service will let marketers pay each time someone clicks to watch a video on the microblogging site, the San Francisco-based company said today in a blog post. Twitter started adding video players within tweets earlier this year.

Chief Executive Officer Dick Costolo is seeking ways to generate more profit from Twitter’s 271 million users. The new feature follows similar moves by rival Facebook Inc., the world’s largest social network, to capture a bigger slice of the digital-video ad market, which is projected to expand 42 percent to $5.96 billion in the U.S., according to researcher EMarketer.

Related: Twitter Says Gnip Cost $134.1 Million, Warns of Credit Card Risk

“Video is a big deal for Twitter,” said Brian Blau, an analyst at Gartner Inc. “Video was the biggest thing missing from their product. Facebook is very far ahead with video.”

Facebook has added high-quality video promotions that compete for advertisers’ television marketing budgets. The company also recently purchased LiveRail to help distribute video ads across the Web.

Photographer: Patrick T. Fallon/Bloomberg

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Photographer: Patrick T. Fallon/Bloomberg

Twitter Inc. Chief Executive Officer Dick Costolo is seeking ways to generate more profit from Twitter’s 271 million users.

In addition to advertising, Twitter is encouraging certain brands and high-profile users to start posting more videos, whether they’re promotional or not.

“The overall goal is to bring more video into our users’ timelines to create a richer and more engaging Twitter,” the company said in the post.

To contact the reporter on this story: Sarah Frier in San Francisco at sfrier1@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson, Jillian Ward

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