Twitter Inc. and Omnicom Group Inc. signed a $230 million deal on Tuesday that will combine Omnicom's ad buying unit Accuen with Twitter's ad exchange MoPub for the next two years.
The deal will lock in ad rates and inventory access for Omnicom agencies, and will also provide the holding company with a "first look" at new at units and opportunities that Twitter is working on, according to The Wall Street Journal.
"This is the first holding company agreement we've done on the mobile ad exchange side," said Adam Bain, Twitter's president of global revenue. "It's great for us because we'll now have high-quality advertisers coming through the exchange."
Bain added that the deal between Twitter and Omnicom is different from the social network's partnerships with other holding companies because it focuses on the technology involved in delivering the ads.
Jonathan Schaaf, president of U.S. Digital Investment of Omnicom Media Group, said the agreement is expected to improve pricing and targeting, The Globe and Mail reported.
"Twitter's been a major advertising partner for our clients in the past ... [Omnicom] wanted to form a closer business relationship with Twitter that extends beyond just media buying," Schaaf said, adding that he expected most of overall advertising to focus on mobile ads.
"The average consumer spends a quarter of their daily screen time with their mobile device and it's only about 10 per cent of the total marketing dollars, so I'd expect that to level off," he said.
Ads bought programmatically from Twitter currently only appear on third-part websites in its MoPub network. However, the social network is looking to allow marketers to buy ads on its own site soon through the same process as well, The Wall Street Journal reported.
"We haven't made an announcement about opening up Twitter to programmatic buys, but it's natural that we'll do it," Bain said.
Omnicom said in a statement that its deal with Twitter "reflects what we look for in a media partnership - the opportunity to deliver first-to-market benefits that impact all aspects of all Omnicom clients' digital investments, from content to placement to measurement."
