‘Grasping at straws’: Buyers say Twitter’s new pre-rolls won’t scale

With its advertising business struggling, Twitter is making a new video push.

Yesterday, Twitter introduced pre-roll ads for Periscope videos, and, earlier this month, the platform opened its live-video API with the intention of making it easier for publishers to post live videos. Although video is Twitter’s largest revenue generator, buyers are skeptical that clients will adopt the platform’s new video products at scale as it attempts to pull itself out of the advertising doldrums.

“Overall, this is not a significant ad placement in the grand scheme of things,” said Jeff Kauffman, media group head at The Richards Group. “It is a quick way for a struggling platform to milk a few ad dollars out of brands while they try to reinvent themselves.”

The new ads can be placed in front of live and replayed videos on Periscope, and they are only available to the roughly 300 partners in Twitter’s Amplify program. Twitter declined interview requests for this story. But a source with knowledge of the program said that the ads are of varying length and skippable after six seconds.

Over the past year, platforms have ramped up their live video offerings, and Twitter’s products fall in line with that trend. Live video might be all the rage, but it is difficult to monetize, and it is unlikely that will be an exception for Twitter.

“It makes sense why Twitter would do this, but I just don’t look at it and say it automatically will be a huge win,” said Maikel O’Hanlon, vp of social media strategy at Horizon.

Because of the heightened concern over brand safety in the current political climate, multiple buyers said that Twitter’s new products are intriguing since they are limited to appearing on videos from brand-safe Amplify partners like MTV, Sports Illustrated and Univision. Since the ads are associated with premium content, marketers from Mediabrands Society and Possible were bullish about Twitter’s video products.

However, every buyer who spoke to Digiday for this story agreed that their spend on new Twitter video products will likely remain low.

“At least in the near future, we don’t expect much investment in this,” said Erica Lee, head of media strategy at Bailey Lauerman. Lisa Purpura, group director of media at VML, added, “My gut feeling is it probably won’t make a significant blip in [Twitter’s] ad income.”

One reason the ads could have trouble scaling has to do with the trade-offs with brand safety and reach. Limiting to 300 partners at least lets advertisers know where ads will appear. However, it also limits inventory, and without mandates that force publishers to regularly create live videos, the supply could be erratic.

But the biggest roadblock to scale is Twitter’s user-growth slowdown. In the fourth-quarter of 2016, Twitter added just 2 million users while Facebook added 72 million users.

“New video products alone aren’t going to solve Twitter’s problems,” said media industry analyst Rebecca Lieb. “The platform needs to increase its active user base to remain attractive to advertisers.”

Veronica Lincoln, senior social and digital media strategist at The Community, had a blunter assessment of the situation.

“Twitter is grasping at straws to create ad revenue where it doesn’t exist as a last-ditch effort to support the business,” she said. “Frankly, this unit is not something brands will be jumping to embrace with options like Facebook Live’s mid-roll units, which will blow this out of the water.”


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