Madison Alley Insight by Boris Fridman, Managing Director, Media & Ad Tech Platforms

On June 30, 2014, social network Twitter (NYSE: TWTR) agreed to acquire TapCommerce, an NYC-based mobile retargeting specialist, for a reported $100 million.

TapCommerce

Founded in 2012, TapCommerce provides a programmatic platform for delivering retargeted advertisements (i.e., ads that are served based on a person’s prior response to one or more ads). Think Criteo (NASD: CRTO) for mobile apps.

TapCommerce raised about $12 million in two rounds from savvy mobile and digital media investors, including Eniac Ventures, Metamorphic Ventures and RRE Ventures. It serves major customers such as eBay and Zulily.

Our View

Tap Commerce complements Twitter’s other ad tech acquisitions, MoPub and Namo Media, equipping Twitter with its own programmatic buying demand-side platform (DSP) for app marketers and brands.

For publishers, MoPub powers the Twitter Publisher Network with a proprietary supply-side platform (SSP). MoPub, one of the world’s largest mobile ad exchanges, enables Twitter to offer demand-side partners programmatic, real-time access to its growing third-party inventory from MoPub publishers.

Namo Media added tools for building native ads (i.e., mobile app install ads that have been very profitable for Facebook) that could be delivered inside Twitter’s own feed and importantly, third-party inventory sold by MoPub. The latter point highlights that Twitter is determined to generate ad revenue outside its own walled garden.

Now with TapCommerce, Twitter owns a platform that will let app marketers and brands buy re-engagement ads using the wealth of data that Twitter owns about its users across Twitter, MoPub, and other exchanges. Invariably, it will enhance Twitter’s recently launched mobile app install offering, provided that TapCommerce adds self-service buying capabilities to its mostly managed services operation.

Strategic Interest of Twitter

With mobile ad revenues representing more than 80 percent of its total ad revenue in Q2 2014, social network Twitter is moving aggressively into mobile advertising. It has already spent approximately $500 million on the three acquisitions mentioned above.

Mobile presents a significant growth opportunity for Twitter. According to Gartner, mobile ad spending is projected to reach $18 billion in 2014 and $42 billion by 2017. The troika of Google, Facebook, and Twitter is expected to capture well more than 50 percent of this spend. We believe Twitter will continue strengthening its mobile ad offerings organically and through acquisitions.

Contact Boris Fridman with your thoughts and comments.