A bird in the hand is worth two in the bush, they say. That may be true, but Twitter is discovering that the two in the bush may be more valuable than anybody thought. As Twitter accelerates its mission to monetise, it’s realised that it’s not just registered users that are of value – but also non-participatory observers.
Adam Bain, Twitter’s president of global revenue, was in Sydney this month on a whirlwind tour of agencies, broadcasters and brands to mark a year of the platform’s operations in Australia. And to make a not so subtle play for a bigger share of advertising budgets in Australia by outlining its broader market view, along with new tools and metrics to get advertisers spending.
In its second-quarter results, Twitter reported 129% year-on-year growth in advertising revenue, and 90% growth in its data and licensing division – the strongest in six quarters. But it doesn’t split out any user numbers or revenue figures in the Asia-Pacific region, so it’s hard to gauge performance here. One thing, however, is clear – Twitter is out to woo Australian advertisers.
Its public nature is what Bain believes provides the next stage of Twitter’s monetisation strategy. The social network has recently started thinking beyond its users, to consider the reach it has with audiences who only ever come to observe. The silent bystanders who consume Twitter via TV shows, through other websites, who search but never log in, let alone tweet. There are two or three times as many of them as there are logged-in users, he says. With 270 million monthly active users globally, that’s a substantial crowd.
“What’s the value of those people?” he asks. “Twitter is live, public, and conversational. It’s the public nature that makes our non-users interesting. We haven’t started monetising that audience yet, but we think it’s got huge potential. This is the really important thing that not many people are aware of – that consumption of tweets doesn’t just happen in a logged-in state. It’s anyone who watches TV, anyone who reads newspapers. It’s a really valid way to use Twitter,”
But, before looking at the next stage, consider where it is at now. Twitter has been officially up and running in Australia, with offices in Sydney’s CBD, for only a year. Over that time it’s grown staff numbers to about 30. The Asia-Pacific region is its fastest-growing globally, but one of the criticisms lodged at Twitter by agencies in the region is that, relative to the proportion of budgets it commands, it gets a disproportionate share of voice. Twitter’s play is to dial up the dollars to meet the volume.
At the time of its IPO, there were concerns from many quarters that it would lead to the feed being overrun with ads in the race for ad budgets. Has it transpired? Bain doesn’t think so, and claims that feedback from users is that because the paid-for ads on Twitter are so well targetted, so relevant and so in-line with the content, they don’t even register as ads. Bain reckons it is taking a long-term view of monetisation, rather than ramming ads down users’ throats.
Part of the path to monetising is getting agencies on board. Bain says that in the year it’s been operating hard in Australia, the question it faces from advertisers has shifted from “Why should we use Twitter?” to “How should we use Twitter?”. A good shift, he believes.
To help answer that, Twitter is launching Flight School – a modular “curriculum” with lessons and tests to help educate agency teams. He says it’s less labour intensive than the roadshows tech brands such as Google and Facebook have used to educate agencies, and designed so everyone in an agency can learn the lessons, not just a select few.
Much as Facebook started out with brands and businesses seeing success from the organic reach they could gain on Facebook, a lot of Twitter’s value for brands comes from the reach they can attain without buying ads. And Twitter doesn’t make money from that. Some of the most innovative uses of Twitter, such as Tourism Victoria’s remote control tourist, used paid-for elements on the Twitter platform, but that could just as easily have been executed without Tourism Victoria paying a cent to Twitter.
Facebook took a lot of flak for plummeting organic reach as it shifted towards paid ads. Although the disquiet has mostly been assuaged through better communication about how paid-for content and posts actually garner advertisers a better response than organic reach, it was a bumpy ride. As it chases dollars, will Twitter eventually take the same route, squeezing out organic reach with tweaks that force brands to supplement organic reach with paid-for promotion to reach users?
Bain doesn’t believe Twitter is headed in that direction.
“There’s a great organic experience there. It’s great that brands can use the platform organically, as a tool to amplify great work. It’s like a free trial, to see what’s resonating and, when they find something that works, to use the paid tools to amplify it in a dramatic fashion,” says Bain.
Twitter is also putting lot of onus on its role as a complement to TV. Its Amplify product launched last year and despite its big play in the TV space, Bain is adamant that Twitter will remain as a “non-conflicting” distribution partner, with no eyes on content creation. It will, he says, leave the creating down to the users. After all – you are what you tweet.
This story first appeared in the AdNews print edition on the 19 September 2014.
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