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Twitter Buys Another Startup To Serve Better Advertisements

The company said it was acquiring TapCommerce, in addition to rolling out its mobile app install ads product. Re/code reported the deal price to be $100 million.

Posted on June 30, 2014, at 4:22 p.m. ET

Robert Galbraith / Reuters / Reuters

The mobile app install ad is not a new idea, but as Facebook has quickly built a billion-dollar mobile advertising business out of it, Twitter has been hot on its heels.

Twitter's mobile app ad presence saw two major updates today: First, it said it would end beta tests of its own mobile app install ad program and open it up to the general ad ecosystem, and it also acquired Tap Commerce, a firm that specializes in re-engagement, for a reported $100 million.

"Re-engagement" is essentially industry parlance for getting a user who has already installed an app to go back to that app. It works by showing an ad in Twitter timelines that is targeted using Twitter's user information. For example, a user might see an ad to go play new Candy Crush Saga levels once they are released by parent company Tap Commerce's ad service is used by 50,000 applications across many exchanges, which Twitter said in its announcement would not change.

By introducing new advertising products and improving targeting, Twitter can build its advertising business. The company has had trouble keeping up with Wall Street's expectations for user growth, but it can make the case to investors that its ad targeting is improving and is competitive with larger platforms like Facebook. Twitter says its advertising network, powered by an advertising company called MoPub that it acquired in September last year, reaches more than one billion mobile devices.

Facebook rolled out its own re-engagement advertisements for mobile devices in October last year, and already some startups are looking beyond even re-engagement for new mobile app advertising businesses. One such example is Chartboost, which helps app publishers set up deals directly with each other without the use of an exchange to sell and share installs.

Tap Commerce raised $10.5 million from venture capitalists in November last year. The deal price, which Twitter did not disclose, and acquisition news was first reported by Ina Fried at Re/code.

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