Twitter ad revenues to soar

Online merchants are set to spend heavily on Twitter advertising in the next few years.

According to research from eMarketer, global ad revenues at Twitter will grow 210 percent to $139.5 million by the end of this year, up from just $45 million in 2010.

Furthermore, by 2013, the company expects Twitter to be generating ad revenue in excess of $400 million.

Debra Aho Williamson, eMarketer principal analyst, said that revenue is surging because a number of firms have shown a demonstrable benefit from advertising on Twitter.

"Marketers have seen solid engagement rates with Twitter advertising - in some cases better than those on Facebook - despite Twitter's relatively smaller audience," she added.

Tim Gibbon, director at Elemental, says that online retailers need to understand that by using social media advertising, they are effectively allowing the public to help shape how the brand is perceived.