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Twitter to roll out self-service advertising system

February 16, 2012|By Jessica Guynn
  • Twitter is looking to make money from a new self-serve advertising system for small businesses.
Twitter is looking to make money from a new self-serve advertising system… (Jon Krause )

Small businesses will be able to buy ads on Twitter through an automated system starting in March, the company said Thursday.

The move could give the San Francisco Internet company a big boost in its effort to make more money and compete with Google and Facebook for digital advertising dollars.

The automated system is to be more broadly available later this year. At first, it’s limited to advertisers who use or accept American Express cards. American Express will buy $100 in Twitter ads for each of the first eligible 10,000 card members or businesses in the U.S. that sign up.

The automated system is like Google’s. Advertisers will decide how much they want to spend on ads and where they want the ads to appear, and they’ll write their own messages no longer than 140 characters. Twitter charges advertisers when the ad gets a response, such as a user following the advertiser, retweeting the message or clicking on a link.

Until the launch of the ad system, advertisers still have to go through a Twitter sales representative.

Last year Twitter generated about $140 million in advertising revenue, according to research firm EMarketer. This year, Twitter should pull in $260 million -- nearly twice as much -- in part because of this new self-service system, EMarketer predicts.

Twitter, like Facebook, has taken its time in rolling out ads to avoid annoying or alienating users. It started selling ads for the first time nearly two years ago.

Even as Facebook prepares for a multibillion-dollar initial public offering, Twitter -- which has a lofty valuation of $8.4 billion -- has deflected questions about when it plans to sell its stock to the public.

Twitter Chief Executive Dick Costolo told CNBC that small businesses have been “banging down the door,” begging to buy ads.

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