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Twitter signs biggest ad deal yet with SMG

The deal reflects rising importance of Twitter in media and marketing.

Social networking service Twitter has signed its biggest advertisement deal to date worth hundreds of millions of dollars with Starcom MediaVest Group (SMG) to improve revenue, reported the Financial Times citing people close to the situation.

SMG is part of Publicis Groupe. Some of the SMG’s clients include Procter & Gamble, Walmart, Microsoft and Coca-Cola.

Adam Bain, president of global revenue at Twitter, said: “We think that the industry had been focused in the wrong area, which was making a decision between Twitter and TV. That’s not what we believe. Twitter is a bridge.”

The multi-year deal allows SMG’s clients access to preferred advertising slots on Twitter, research and data, and new products, such as an “In-tweet mobile survey” programme that will allow companies to poll consumers for real-time opinions, reported FT.

The deal is likely to put pressure on television firms to include more digital and social media offerings in their products. It comes only weeks before US television networks sell about three-quarters of their commercial inventory in the annual “up front” market.

Laura Desmond, global chief executive of SMG, told the FT: “Twitter, in a very short period of time, has gone from an experiment to something that is essential. This signals to the marketplace how we want to conduct business and measure the implications. This is the future. It’s convergence.”

The deal, which is not exclusive and does not restrict Twitter from signing similar agreements with other marketing firms. It comes as Twitter unveils a flurry of new advertising products and plans to work in partnership with TV networks.

While the spending marketers commit to Twitter remain a fraction of the $205bn they spend on television globally, budgets are shifting quickly.

Twitter’s global ad revenues are expected to almost double in 2013 by reaching $582.8m, an increase from $288.3m last year, according to research firm eMarketer.

A recent Nielsen study confirmed a strong correlation between rise in Twitter volume and TV ratings.