Twitter has a revenue problem on its timelines and it knows it. The company is seeking to bolster its advertising division with the acquisition of TapCommerce. Terms of the deal aren’t known, but some are placing the figure at around $100 million.
Most are probably wondering, what does TapCommerce do? The company specializes in retargeting consumers after they have downloaded an app. They split test different ways to engage the consumer to come back and shop. Some popular companies TapCommerce has counted on as clients in the past include Fab and eBay.
Verticals that sell goods via apps find the retargeting especially appealing. Industries such as gaming, travel and retail all find the tools attractive. TapCommerce should nicely integrate with Twitter’s new mobile app install ads.
The new ads allow a user to directly install the app after they click the advertisement. Twitter believes the one-two punch of mobile install ads and retargeting will be an advertising win for the social media company.
Ads are vital to Twitter. Over 90% of the company’s revenue comes from advertising, and the company is already facing headwinds. It has increased competition from Facebook and Google. Add in the slowing user growth, and the company has a bit of a problem on its hand.
Twitter’s upper management remains optimistic about its growth prospect, but the slowing growth can have advertisers shy away. The hope within the company is that it’s growing advertising suite can help the company suck in more advertisers.
It will remain to be seen if the TapCommerce purchase can have an immediate impact, or if the purchase turns out to be more strategic in nature.