Twitter's Plan To Make Money? It's All In Your Stream
We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale.— Twitter (@Twitter) September 12, 2013
Twitter, the social media platform credited for both spreading democratic uprisings and the twerk seen 'round the world, is going public. It's a company that, according to analysts, probably hasn't earned $1 billion in revenue yet, but is valued somewhere around ten times that. Once Twitter stock is available, capitalism governs that it's gotta keep making money.
Luckily for Twitter, it's evolved from a simple, text-based service to a more complete media company, with a video platform (Vine), content partnerships (too many to count) and a feed that shows full-blown embedded media in its stream. That content no longer appears in strictly reverse-chronological order, opening up different opportunities for adding advertising into your streams. There are a few ways Twitter will likely bring in the moolah. The company's recent moves have telegraphed the possibilities:
If you're a Twitter user who still watches any appointment television, like Monday Night Football or, say, Breaking Bad each Sunday, you know how Twitter can serve as a "second screen" to check while watching TV. It's kind of nice to have the vast social media universe there when you want to complain about a ref's bad call, you know?
Twitter's pitch is that advertisers can take advantage of the community that comes together around events to overlay and target their marketing. For example, during the Superbowl blackout in New Orleans in February, Oreo played off the unplanned incident by tweeting out a now-famous viral missive, "You can dunk in the dark."
A Forrester Research analyst told The Guardianthat the effort "has not been a success" financially so far. But Twitter's just getting started. To better marry data on social conversations with advertising, Twitter has acquired two startups this year that analyze social-network activity related to TV.
Embedded Ads In Your Stream
The changes are subtle if you're not an obsessive Twitter user, but its main timeline or stream had previously presented tweets in strictly reverse chronological order. Now, it bumps up older tweets in order to make conversations read more smoothly. This change presents an opportunity: Since Twitter now shows video and photos, imagine the value for advertisers if their visual ads didn't even have to get clicked on, they just played in existing streams.
Twitter says it has about 200 million users sending more than 400 million tweets daily. And it says nearly 60 percent of the tweets are sent through mobile devices. This is a huge opportunity area for Twitter, which this week bought MoPub for $350 million. MoPub is a global mobile ad exchange, giving Twitter a platform to sell mobile ads that target users based on data. And a lot of that data will be what Twitter has collected from its users. Former Facebook advertising executive Antonio Garcia wrote that the move makes Twitter "the most interesting company in advertising right now."
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