March 28 (Bloomberg) -- Twitter Inc. is planning to release a mobile-advertising product in the next few weeks that application makers can use to encourage downloads of their programs, according to people with knowledge of the matter.
The format, known as an app-install ad, will help the San Francisco-based microblogging company attract marketers in the e-commerce and game industries, said the people, who asked not to be identified because the information is private. If users click on one of the ads that appears in their Twitter feed on mobile devices, they will be directed to the advertiser’s page in a mobile-app store where they can download the program.
Twitter is expanding its mobile-ad offerings as it works to deliver on the promise of its November initial public offering. The company’s stock has soared 78 percent since then as analysts have anticipated Twitter’s annual revenue will almost double to $1.2 billion this year, even as user growth has slowed. Mobile is a key piece of Twitter’s business, since that’s where its user base is growing faster and where it derives more than 75 percent of ad revenue.
Will Stickney, a spokesman for Twitter, declined to comment yesterday.
App-install ads have helped boost revenue at other social networking companies. Facebook Inc. introduced the ads in October 2012, driving 245 million app downloads last year, the company has said. King Digital Entertainment Plc used the Facebook ads to promote its mobile game “Candy Crush,” which has since become one of the most popular titles on Apple Inc.’s app store. King went public earlier this week.
Twitter has been testing app-install ads for at least several weeks, said the people. The product has improved over that period, according to Adknowledge Inc., a Kansas City, Missouri-based ad-targeting company that has been working on the tests. For one mobile-app maker, the cost of acquiring a new user dropped by four-fifths after using the ads, which were as effective as one of Facebook’s ads, Adknowledge Chief Executive Officer Ben Legg said in an interview.
Twitter has also updated its mobile applications to get users to spend more time sharing tweets and messaging each other, while working to make it easier for advertisers to target its 241 million users. Twitter’s advertising will expand across the mobile Web through its acquisition of MoPub Inc., a mobile advertising exchange, in October.
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