Why does Twitter buying MoPub matter? It’s all about persistent identity and mobile ads

Twitter spent a reported $350 million or so to acquire a mobile advertising company called MoPub earlier this week, a deal that didn’t get a lot of notice in the build-up to Apple’s big iPhone update. But in a blog post following the news, Antonio Garcia — the founder of AdGrok, which he sold to Twitter, and the creator of Facebook’s real-time ad exchange — makes a persuasive case that Twitter’s acquisition of MoPub is a huge move, and could alter the competitive dynamic between Twitter and Facebook substantially, tilting it in Twitter’s favor.

In his post, which is entitled “Why Twitter Buying MoPub Is a Very Big Deal,” Garcia notes that the company is the world’s largest mobile ad exchange, and says acquiring them effectively makes Twitter “the most interesting company in advertising right now.” That’s because the two biggest trends affecting the ad industry are the shift toward mobile and the rise of programmatic buying, says Garcia — and the addition of MoPub puts Twitter at the center of both:

“It’s a bigger, ballsier bet than my former employer ever made, and it puts Twitter way ahead of any other social media player. I hate the douchey cant of MBA-speak, but to the extent we can use the term ‘game changer’ without puking in our mouths, this move is that.”

Better targeting is what everyone wants

Targeted advertising / Behavioral targeting

The problem in mobile, Garcia says, is the same problem that web advertising was wrestling with a decade or more ago: namely, it’s very difficult to get a good picture of where your ad will appear or who will see it and when, and there’s little or no ability to target specific ad messages effectively — and that includes Facebook, he says. The Facebook ad exchange or FBX and services like MoPub are an attempt to improve that by tracking ads and collecting information about the users who see them.

But it’s still difficult to get good data on users and their behavior, Garcia argues, because advertisers don’t want to share whatever data they get through the browser, and content publishers like the Wall Street Journal or New York Times don’t want to share either — because both want to keep the data so that they can target their own ads. Into that void steps Twitter, says Garcia:

“They know whom you’ve followed, what you’ve Tweeted, as well as what pages on the Web you’ve browsed. Remember, there are Tweet buttons over the entire Internet, which means they know what websites you’ve visited. That’s very valuable data they can suddenly inject into the real-time ebb and flow of browsing data… It’s also longer-lived data because it’s tied to a Twitter user ID.”

That interest graph will allow Twitter and MoPub to target advertising better than just about anyone else, Garcia says, and that includes Facebook — which hasn’t done much in that regard, perhaps in part because it is gun-shy about privacy concerns. The AdGrok founder (who seems to regret going to Facebook instead of following the rest of his company to Twitter) argues that this ability could put Twitter in the same elite league as companies like Google and Amazon.

The Holy Grail of marketers

twitter bird tweets logo drawing

As Garcia describes it, when a user is logged into Twitter on both the desktop and a mobile device, the service will be able to combine what they know about that person’s activity in order to make better guesses about what ads to show them:

“Since you’re logged into Twitter on a desktop browser and on a mobile device, the browser cookie from your computer and the device ID from your device are joined. Twitter will join those two in a data-safe way [and by] doing that, they have within reach that heretofore unattainable Holy Grail of marketers: a permanent, stable, and immutable key that identifies everybody online, on every device, all the time.”

The result will be higher prices for ads in which Twitter is involved, Garcia says, because there will be more obvious value for advertisers. If an ad impression on Twitter led to a sale on your mobile app, you will likely be willing to bid higher for that in the future, and “no one else can string those events together right now other than Twitter. This isn’t just some little targeting twiddle: This is Twitter providing the source of truth for ads on mobile.”

Could Twitter be close to solving the puzzle of mobile advertising with MoPub? Garcia believes that it is. Now all the company has to do is prove that he’s right — and in the meantime, avoid the kind of privacy and identity problems that have likely kept Facebook from getting there first.

Post and thumbnail images courtesy of Shutterstock / Eldorado3D, Shutterstock user Inq and Flickr user Shawn Campbell