Twitter Gets Serious With New Advertising Deal


In the latest sign that Twitter's advertising business is coming of age, it inked its first multi-year upfront ad commitment with ad giant Publicis' Starcom Media Vest.

Twitter wouldn't reveal the financial details of the deal, which was first reported by the Financial Times, other than confirming it was worth hundreds of millions of dollars.

Twitter's head of revenue, Adam Bain, said the agreement, which is for two or three years, is a big deal, both for how it'll bolster the company's bottom line, and for how it strengthens the company's relationship with Madison Avenue.

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With this partnership, Starcom Media Vest is committing to a certain amount of advertising spend, right before the upfront ad sales season. While many of Starcom's advertisers, including Procter & Gamble, Wal-Mart and Coca Cola, already buy ads on Twitter, the company said that the volume of ads in this new deal will be much greater.

Twitter's Bain said this partnership shows that advertisers are eager to think about spending on "Twitter AND TV, rather than Twitter instead of TV." And the partnership is focused on leveraging the Twitter-TV connection.

At the heart of the deal is the fact that Twitter and Starcom are creating a "social TV lab" to understand the way that people interact with both screens, and to develop new and better ways for brands to communicate consistent, effective messages across both platforms. As part of the deal, Twitter will give Starcom's clients more research and data, as well as the most desirable ad slots and early access to new ad systems that Twitter is testing.

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This deal could pave the way for Twitter to strike other ad deals, especially as we move into the key upfront ad sales system. First, it indicates that advertisers will allocate more of their dollars to Twitter. And second, this deal isn't exclusive, so Twitter could secure similar deals with the other ad giants.

The ad agencies have made similar upfront commitments to Facebook and Google, and now that Twitter can deliver the metrics to understand return-on-investment, Twitter is now playing in the same pool.

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Twitter is also moving forward with aggressive plans to integrate TV clips directly into its platform, a way to cash in on ad revenue while also directing consumers back to TV. The company recently announced a partnership with Turner and the NCAA to highlight video clips, and has other deals with BBC America and the Weather Channel.

"It's a series of firsts," Bain said, "and a good signal to the market about the huge opportunities, and the huge roles agencies have on Twitter."

—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin