Why Twitter’s $350 Million Acquisition Is Brand Publishers’ ‘Holy Grail’

Did you hear that Twitter acquired the biggest mobile ad exchange on the planet this week? We can’t blame you if you missed it amidst the hubbub around the social network’s surprise “secret IPO” announcement (and the release of a certain phone). But it’s a very big deal for brand publishers.

Why? This acquisition has the potential to give brand publishers unprecedented power to distribute content to exactly the right audience at a fraction of the cost that they’re paying now.

After all, brand publishers’ biggest challenge isn’t creating great content anymore; it’s getting enough people to read it. In an effort to attract eyeballs, brands like Virgin are paying $100,000 a month to run a bunch of sponsored stories (aka native ads) on Buzzfeed and borrow their audience. Programs on other publisher sites don’t stretch into the six figures–nor do all of Buzzfeed’s offerings–but it’s still relatively expensive. (Though still effective.)

This acquisition has the potential to give brand publishers unprecedented power to distribute content to exactly the right audience at a fraction of the cost that they’re paying now.

So far, there hasn’t been a great alternative. It takes a long time to turn a digital magazine into a premiere destination site, and even if you have a million Facebook likes and another million Twitter followers, those channels are only going to drive so much traffic. Content distribution platforms like Outbrain, while on a cost-effective CPC model, leave a lot to be desired when it comes to audience targeting.

One alternative has been Facebook’s Sponsored Stories and Twitter’s Promoted Tweets, which allow brands to place content in a native environment that users are sure to see—their social stream. But until recently, brands couldn’t target specific audiences in the same way that they could reach listicle-loving Millennials on Buzzfeed or marketing junkies on Digiday.

That all started to change this past spring, when the Facebook Ad Exchange (FBX) added “Page Post” offerings that allow brands to place content-rich native ads into users’ News Feeds based on the sites they visited and the searches they performed. (A practice known as retargeting.) So if a user just spent his afternoon reading about space flight and then visited Facebook, Red Bull could target him with an ad featuring a behind-the-scenes video of Felix Baumgartner’s epic space jump. Pretty cool… in theory. Actually connecting all the dots across desktop and mobile devices to target the right users with the right ads has proven a lot more difficult in practice.

Which brings us back to Twitter’s acquisition of MoPub. On Medium, Antonio Garcia, the creator and builder of FBX, writes: “This [acquisition] makes Twitter the most interesting company in advertising right now.”

Why? Because Twitter has access to treasure trove of data that allows them to connect the dots and target users across sites and devices—what Garcia calls “that heretofore unattainable Holy Grail of marketers.”

Acquiring MoPub allows Twitter to put this data to use and give advertisers the power to serve native ads to exactly the right audience in their Twitter stream. And they will. Digiday reports that Twitter’s VP of Product for Revenue, Kevin Weil, assured MoPub that they’d bring native ads to the platform—not just on Twitter, but likely in other mobile environments as well.

Twitter has access to treasure trove of data that allows them to connect the dots and target users across sites and devices—what Garcia calls “that heretofore unattainable Holy Grail of marketers.”

If advertisers are smart, they’ll include rich, engaging content in those ads, and they’ll get a better sense of how they’re working, since Twitter’s ability to connect the dots will allow for more accurate attribution. Since this programmatic experience will make it much cheaper to target desired audiences, cutting out publishers as the middle man, that could mean the kind of ROI numbers that get brand publishing a bigger slice of the marketing-budget pie.

And don’t you just love marketing-budget pie?