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This Twitter ad buy is trending in advertiser's playbooks

Friday, 13 Sep 2013 | 10:18 AM ET
Yasuyoshi Chiba | AFP | Getty Images

After announcing in a tweet on Thursday that it's going public, the social media company headquartered at 1355 Market Street in San Francisco, California is trending everywhere.

Twitter, now officially en route to an IPO, has turned its microblogging service into a social media powerhouse, leading some to value it at $10 billion or more.

The seven-year-old company—which is expected to earn $582.8 million in global ad revenue this year, according to eMarketer—has its more than 200 million users to thank for such a high valuation, as well as the brands who have flocked to it in recent months.

(Read more: IPO 'not that interesting'?)

How Twitter Makes Money

Twitter needs to improve advertising as IPO looms
Benjmain Cohen, tech entrepreneur, says that Twitter needs to focus on expanding its advertising capabilities as the microblogging site is set for an IPO.

Moving away from traditional print advertising and banner ads, companies of all sorts are shelling out thousands of dollars each day on Twitter's three advertising products: Promoted Accounts, Promoted Tweets and Promoted Trends.

But it's the latter buy that's opening companies' wallets wide.

Twitter showcases trending topics – nine to be exact – alongside users' streams to let them know what's being most buzzed about.

Want to be featured there? Create something viral. You can't? Then pay for it.

(Read more: The Twitter revolution)

Twitter allows a single "Promoted Trend" to sit above the other nine. According to a source, brands are asked to pay $200,000 a day in the U.S. if they want to feature a trend – usually a hashtag – of their choice.

This digital billboard is in high demand.

Over a six-month period from March to September, Twitter may have raked in as much as $23.8 million with its U.S. promoted trend, selling the digital billboard 119 times in 179 days, based on tracking by CNBC.

Twitter didn't immediately reply when emailed for comment on the pricing.

Brands and Budgets

So who's buying?

By CNBC's count, media companies promoting movies and TV shows were most interested in the ad buy, purchasing 43 promoted trends for a total of $8.6 million during that time.

The technology industry bought 24 trends ($4.8 million), while food and retail companies purchased 31 trends ($6.2 million). Education services, auto companies and the finance industry ordered a combined 17 trending topics for $3.4 million.

Time Warner's Warner Brothers led the pack with nine buys, followed by McDonald's with seven. Sony Pictures, Google and Samsung each purchased five trends.

It's worth noting that the money spent here does not include additional purchases on Promoted Accounts and Promoted Tweets, which advertisers also tend to invest in on days it features its trending topic.

(Read more: The biggest tech IPOs)

Paying To Be Trendy

Following the Twitter IPO timeline
CNBC's Kayla Tausche has the latest details on Twitter's plans to go public.

For now, the $200,000 spend looks like it's paying off.

In a study released this week, Twitter said its "users produced 22% more conversations about an advertiser compared to the two weeks before exposure."

Not only was there added buzz, but it was good buzz, too.

"We saw a 30% lift in brand mentions bearing positive sentiment, and a 32% lift in Retweets or mentions" in that time, Twitter said.

Companies looking to be front and center on days of product launches and events have clearly added the Promoted Trend to their playbook.

As have their competitors.

On the day Apple unveiled its two new smartphones this week, Samsung went on the offensive, purchasing a Promoted Trend for #TheNextBigThing.

When clicking on the hashtag, Samsung displayed its new devices, including a smartwatch.

"Apple [is] not trending yet. Get going Apple!" tweeted Twitter user @Kzaleski after noticing Samsung's ad.

By CNBC's Eli Langer. Follow him on Twitter at @EliLanger.

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  • Matt Hunter is the senior technology editor at CNBC.com.

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