• by Laurie Sullivan  @lauriesullivan, December 5, 2013

Twitter released an ad-targeting tool Thursday that allows advertisers to target users who have shown interest in specific brands or categories, even off the site, by bringing their own audience or using data from a long list of third-party providers.

The tool -- tailored audiences -- requires brands to share with Twitter browser-related information, such as browser cookie IDs, through an advertising network partner. Twitter then matches that information to the user's account to serve a Promoted Tweet.

Advertisers will continue to receive the same reports that tell them the number of users who saw or clicked on an ad, without identifying who saw it or clicked on it.

eMarketer estimates that Twitter's ad revenue worldwide will reach $582.8 million in 2013, rising to nearly $1 billion next year. The data firm suggests about 53% will come from mobile advertising this year, up from virtually no ad revenue from mobile in 2011.

Leveraging first- and third-party data, a host of companies have partnered with Twitter to provide support such as Adara, AdRoll, BlueKai, Chango, DataXu, Dstillery, Lotame, Quantcast, ValueClick, and [x+1]. Connecting with data partners like BlueKai allows brands to bring in online, offline and modeled data to Twitter.

Delta Air Lines and their agency partner Digitas participated in the beta test of tailored audiences in Promoted Tweets. So did HubSpot, which saw an increase in engagement rates of 45% compared with their historical averages, according to Abhishek Shrivastava, Twitter product manager.

Twitter engineers developed a technology referred to as cross-identity layering that allows the company's ad-targeting platform to serve ads across devices, says WordStream founder Larry Kim. He said the technology identifies and matches mobile user logged into the Twitter app with the actions taken on a computer and across the Web.

"This unified identity layer is how they're able to display retargeted ads on mobile," he explains. "When you log into your Twitter account on a desktop computer, Twitter will analyze the cookies in your browser to see where you've been on the non-mobile Web. Then, when you log in to that same account on mobile, it can still use your Web cookies to hit you with retargeted ads."

Kim recently published research comparing Facebook and Twitter ads, which shows that Twitter ads have much higher click-through rates -- up to 10 times higher -- because of the prominent placement in the user tweet streams. "Facebook Ads, however, crush Twitter in terms of post-click conversion metrics like revenue per user," he said, explaining how retargeting remains one of the most precise ad-targeting methods, because people are far more likely to buy something they already planned to purchase.

Twitter also addressed the privacy concerns of users. A do-not-track button has been added. Twitter users can uncheck the box next to “Promoted content” in their privacy settings, and the site will not match their account to information shared by its ad partners. Twitter will not receive browser-related information, such as a browser cookie ID, from its ad partners for tailoring ads if users have DNT enabled in their browser.