Twitter’s Kevin Weil Talks MoPub Deal Rationale And Scaling Native Ads

kevin-weil-twitter-mopubBuying MoPub does a few things for Twitter, potentially.

It adds $100 million in 2013 revenue to Twitter’s income statement in the months leading up to a probable IPO.

It creates an opportunity to monetize Twitter’s valuable data “off-platform” through an internally run mobile exchange. This could work by creating BlueKai-like data segments that would then be biddable to advertisers on MoPub, or – Google style — through a system of biddable hashtags and keywords. So far, Twitter’s not talking about this.

It creates immediate relationships with DSPs and other demand sources, allowing Twitter to leapfrog the difficult “build” process Facebook saddled itself with in the early development of its own Exchange. “MoPub is one of the better exchanges out there. This speeds everything up,” said Eli Portnoy, GM of ThinkNear at TeleNav and a MoPub buyer. “Building an exchange is not rocket science, but there’s a long lead time because there are so many partners involved.”

Finally, it diversifies Twitter’s revenue – adding publisher relationships and standardized mobile ad formats to supplement its core “native ” line of business.

“We think there’s a big opportunity to improve mobile advertising in general,” Kevin Weil, VP of product and revenue,  told AdExchanger. “There’s an opportunity to bring more native advertising to mobile applications – even through an exchange.”

In his discussion with AdExchanger, Weil touched on the deal’s origins, why Twitter picked MoPub specifically and what the deal achieves from a product and revenue standpoint.

When did you start talking to MoPub and how did the deal come together?

Mobile advertising is something we think a lot about. It’s key to our business today. Adam Bain and I are always having conversations with different folks in the mobile ecosystem. We’ve been doing that for the last 12 months, so we can get smarter and keep abreast of technologies. We kept asking people, “Who’s smart, who really gets the mobile space?” And we kept hearing the name MoPub. So we finally started getting to know Jim [Payne, CEO], Janae [McDonough, VP Marketplace], Kevin [Weatherman, VP Sales], Herman [Yang, VP Platform] and Nafis [Jamal], who leads the technology side.

We immediately saw strategic benefits. We immediately saw opportunities on the product side. We learned their technology is first-class. It’s a bunch of ex-Google folks, ex-AdMob folks. They have a lot of MIT grads and Stanford grads. It’s a really strong technology team.

The other thing I loved was that their culture and values are totally aligned with ours. The way they run the business, providing control and transparency to their publishers and advertisers.

Every meeting, we were laughing and having fun even as we learned about each others’ businesses. I think it’s going to be a very natural fit.

How important was being close to each other in San Francisco?

It certainly makes it easier to get together when you want to talk, but they’re already pretty bicoastal. Some of this was local and some was over the phone from New York.

Also, they’re just beginning to spread into EMEA and APAC. It was a pretty global partnership from the beginning.

What was the strategic rationale for buying a mobile exchange?

There are two major trends going on right now. One is a massive shift on the consumer side toward mobile, which we’re all a part of. On the advertiser side, we’re seeing a shift to programmatic buying through real-time bidding. MoPub sits at the intersection of both these trends, but so does Twitter in a lot of ways. Twitter has been mobile since day one, our advertising platform has been mobile since day one. And though we haven’t historically had an RTB platform, we have seen a lot of development on top of our APIs, which we launched eight or 10 months ago.

When we talk to advertisers using our platform, we hear consistently that they love the value they’re getting from it but they want us to help them make it easier, more scalable and more automated. Our APIs were a step in that direction. For those advertisers, we think bringing RTB onto the platform is going to make it even easier.

We’re going to continue to invest in and build MoPub’s existing business. And we believe Twitter can make that stronger. And we see opportunities for MoPub to make Twitter’s existing ad business stronger as well. We are going to use their technology to bring real-time bidding to Twitter inventory.

Does this deal provide a way for Twitter to monetize its own data at scale by using it to enrich the inventory coming through MoPub?

There’s nothing we’ve announced. There’s a lot we have to figure out together with the MoPub team. As we do that we’ll be talking about our plans there.

This takes you out of native ads into standardized mobile formats. Any thoughts on the future of Twitter as a more diversified, distributed seller of mobile ads? 

It definitely takes us off-network.

We think there’s a big opportunity to improve mobile advertising in general. One of the dimensions we believe can improve is mobile creative. We think native advertising considered generally is a major opportunity for mobile advertising. One learning of the business we built on Twitter has been that native ads that fit into the experience are great for users. And because they produce engagement, they mean better ROI for marketers. They’re better all around, and we think there’s an opportunity to bring more native advertising to mobile applications – even through an exchange.

A lot of their business is traditional display, but we think there’s an opportunity to mix up more native advertising in there.

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