Peter Kafka

Recent Posts by Peter Kafka

Twitter Gets a Vote of Confidence — And a Big Check — From Madison Avenue

twitter_moneyMore momentum for Twitter’s growing ad business — a commitment from a big ad buyer to funnel “hundreds of millions” of its clients’ money to the social network.

As the Financial Times reports, Twitter has struck a deal with Starcom MediaVest Group to give its clients “special access to preferred advertising slots, research and data, and new products.” In return, Starcom has agreed to spend “hundreds of millions” over a “multiyear” period — that is, at least $200 million over at least two years.

Other goodies include plans for the two companies to build a “social TV lab” together, as well as an agreement to stream Twitter’s data feed directly into Starcom’s “convergence modeling system and convergence modeling tools,” Starcom CEO Laura Desmond told me.

The two companies aren’t discussing the financial details, but it’s safe to assume that the total spend will vary depending on the value Starcom thinks it is getting out of Twitter. So what that actually means for Twitter’s top and bottom lines will also vary.

But at the very least, it’s a nice public win for Twitter to show off — both to other advertisers who are still trying to figure out what they should do with Twitter, and to investors as it ramps up for an IPO. Note that we’ve seen deals like this before — Google did something similar with Omnicom in 2010, as it was trying to broaden its presence in display advertising.

In terms of public statements, it’s worth noting that Desmond says her company has now moved beyond the trial phase when it comes to Twitter ads.

“Over the last 18 months, we have experimented and tested and learned. We have plenty of evidence that the amplifying affect of earned and paid media drives brand growth,” she said. “We see that Twitter will be part of every evaluation and buying decision for our clients.”

Also of note: At least some of the credit for the deal goes to Bluefin Labs, the analytics company Twitter bought in February. Sources say Starcom and Twitter have been discussing a partnership since last fall, but that the Bluefin acquisition helped close the deal. If so, then the $90 million Twitter spent on Bluefin is already paying off.


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