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Twitter says more than half of its business is video — what does that mean?

Twitter made more than $287 million from video ads last quarter.

Twitter CEO Jack Dorsey
Twitter CEO Jack Dorsey
Kimberly White / Getty Images for Vanity Fair

Twitter has been highlighting its video ad business during earnings calls for years; video ads have consistently been the company’s “largest revenue-generating ad format“ since early 2016.

Now video ads don’t just generate a lot of money for Twitter, they generate the majority of the company’s advertising revenue. Twitter said this week that video ad revenue makes up more than 50 percent of its ad revenue, something that actually happened in Q4 but was only made public this week as part of Q1 earnings.

That means Twitter made a minimum of $287 million on video ads last quarter. Even though Twitter is often considered a distant third in the social video space behind YouTube and Facebook (maybe even fourth behind Snapchat), video ads have clearly become very important to Twitter’s business. You’ll hear a lot about that this week when the company presents all of the video shows and projects it wants to create to media buyers on Monday at the NewFronts.

What’s driving that growth? It’s not entirely clear, but Twitter highlighted a number of possibilities on its earnings call.

CFO Ned Segal specifically called out “video website cards and video app cards” — video ads that direct viewers to a specific destination — as “driving incremental revenue.” He also mentioned video ad growth in Japan, Twitter’s second-largest market; a bigger audience, presumably Twitter’s growing cohort of daily active users; and better “ROI” for advertisers, which means the ads either cost less than they used to or perform better than they used to (or maybe both), as reasons the ad business is doing well.

We don’t know for certain if people are actually watching more video on Twitter, but that would be a fair guess. The problem is that Twitter doesn’t share any consistent stats about users’ video consumption.

In Q2 2017, for example, Twitter boasted that it streamed more than 1,200 hours of “live premium video” to 55 million unique viewers. In Q1 of 2018, it didn’t include comparable numbers for either of those stats. Instead, it boasted that it had more than 1,300 live events and more than 30 “live partnerships.”

That doesn’t necessarily mean that people are coming to Twitter to watch video. But it probably means that Twitter is showing more video, and showing more ads against that video, and since ad revenues are going up because of video, there’s a good chance you will see even more video on Twitter. Make sense?

So, what does Twitter’s video ad business actually look like? You can bucket Twitter’s video ad offerings into three main categories:

  • Promoted video: Promoted video ads are exactly what they sound like: Advertisers pay Twitter to put the ads in front of people who wouldn’t otherwise see them. There are a few types of promoted video you can buy, depending on the goal. Twitter sells a video website card, for example, that redirects people who click to a website, or a video app card that’s intended to drive app downloads. Advertisers can also pay to put their video ad right at the top of everyone’s timeline as the second tweet in the queue, what the company calls “First View.”
  • In-stream video ads (Amplify): In-stream video ads, what many in the media world may refer to as Amplify video ads, are pre-roll video ads that appear before a publisher’s video clip. So if the NFL tweets out a 30-second highlight from Sunday’s big game but wants to make a little money at the same time, the NFL can choose to run a short video ad before that clip. The revenue made from that ad is split between Twitter and the publisher — in this case, the NFL. The ad split is roughly 70 percent of the money to the publisher and 30 percent to Twitter.
  • Video sponsorships: Twitter and its publishing partners sell sponsorships for its lineup of live video shows, like BuzzFeed’s AM to DM and livestreams of Major League Baseball games. (Twitter sold enough of those sponsorships to run 16 shows in 2017.) The sponsorships are all unique and sold via Twitter’s and/or the publisher’s sales team, and the two sides split the ad revenue. The deal might include pre-roll ads that run before the show starts, or more of a content integration, like a branded segment of the show. Each deal is unique in its structure and cost, according to a company spokesperson.

This article originally appeared on Recode.net.

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