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Transcript of Twitter
Businesses use Twitter to share information about their services, gather real-time market intelligence, and build relationships with customers, partners and influencers.
The Twitter Economy
Broad term covering all commercial activity on the internet, including auctioning, placing orders, making payments, transferring funds, and collaborating with trading partners. (internet commerce, 2014)
Twitter's Advertising Model
• LG wanted to promote their new Optimus L Series mobile in UK.
• They aimed for the young target audience, so the company created campaign through a treasure hunt fun game through Twitter that had The Voice show tickets for winners.
• Twitter worked it out and collaborated the use of hashtag and online maps of Great Britain.
Every time someone tweets #LGTicketHunter, the map will then reveal the secret location one step by one step.
Those who were first to reach the secret location won the prize.
Case Study: LG
Case Study: Sharpie
Twitter Case Study
What is Internet Commerce?
• The company would like to gain more young target audience.
• Twitter created the hashtag #Sharpie to gain the awareness and encourage more participants.
• @Sharpie account would show up in the Twitter timeline, ‘Who to Follow’ list.
• Twitter sorted the audience, and @Sharpie account would only show up to users who have interest in arts such as drawing and writing.
>>show up in the list of trending topics
>> show up in the list of whom to follow
This range of options gives advertisers an advantage to pay specifically on their ads performance
Twitter is incorporated in 19th of April 2007
3,300 employees in offices around the world
50% of employees are engineers
271 million monthly active users
500 million Tweets are sent per day
78% of Twitter active users are on mobile
77% of accounts are outside the Unites States of America
Twitter supports 35+ languages
Vine : More than 40 million users
What Twitter is Worth?
Launch : 15th July 2006
Revenue : USD 664 million (2013)
Share Price : USD 53 (2014)
Funds : USD 57 million
Early market entrance
Has a strong brand name
Blue bird logo is a strong symbol that represent and easily recognised as Twitter
Has credible celebrity accounts
Highly used by celebrities
Custom shortener with tracking
The platform is free to use
Vine is connected and owned by twitter
140 character count limit
Business model has limited scope of expansion
Unable to innovate and offer new features for the platform
Over promotional content
No sharing widgets
Lack focus on achieving business goals
No custom URL shortener on platform
Help new businesses to grow
May become a dominant way for businesses to communicate with their customers
To invite more celebrities and organisations and create credible account (blue tick next to credible Twitter accounts)
Direct relationship between buyers and sellers
It is becoming one of the biggest social media marketing tool (used for advertising a business, charity or event)
It may become a dominant way for business to communicate with their customers
It can become a dominant search engine
The psychological impact which enable users to directly/indirectly communicate with celebrities they are following
Creates loyal users
New and upcoming social media platforms
Competitors present in the current market
Fake accounts used for spamming
Duplicated and spam accounts
Accounts being hacked into
Unanswered customer service requests
Facebook may be able to compete with Twitter in the micro-blogging sphere
Facebook and Instagram started to incorporate hashtagging
Paid Twitter streams may hurt the brand image
Fake celebrity accounts are rampant
Twitter charge companies based on the user interaction with ads.
Payments are received when user interacts with sponsored ads (retweet, reply, favorite, click)
• Twitter offers advertisers to specify how they want to spend their advertising budget
e.g. when their account gets new followers, when users click through to their website’s page
• Company only has to pay when users interact with their ad message whether clicking on the tweet, replying to the tweet or retweeting the tweet to other Twitter followers.
• Twitter's business model is seen as appealing to small and medium-size businesses.
• For first-time advertisers, Twitter business model is more accessible and affordable.
Currently, there are 4.5 million small-businesses accounts and thousands of them advertising on Twitter.
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Gauntlett, D. (2004). The attention economy explained by David Gauntlett. Retrieved from http://www.newmediastudies.com/economic.htm
Leibowtiz, S. J. (2002). Basic economics of the internet. In Re-Thinking the Network Economy: The True Forces that Drive the Digital Marketplace (pp. 9-24). Retrieved from http://edocs.library.curtin.edu.au/eres_display.cgi?url=dc60264075.pdf©right=1
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Ovide, S. (2012, February 17). Twitter to Pursue Smaller Ad Clients. Wall Street Journal [New York]. Retrieved from http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/921659489/A3E4C0A8CD71475DPQ/1?accountid=10382
Passingham, M. (2013, October 4). Twitter IPO: What we learned about the micro-blogging firm from its filing - IT Analysis from V3.co.uk. Retrieved from http://www.v3.co.uk/v3-uk/analysis/2298824/twitter-ipo-what-we-learned-about-the-micro-blogging-firm-from-its-filing
Rusli, E. M. (2011, July 8). Twitter to Raise $400 Million, Remaining Private for Now. The New York Times [New York], p. B4. Retrieved from http://search.proquest.com.dbgw.lis.curtin.edu.au/docview/875438563
Twitter Reports Second Quarter 2014 Results (NYSE:TWTR). (2014). Retrieved from https://investor.twitterinc.com/releasedetail.cfm?releaseid=862505
The Art of Hashtagging
The hash tagging function on Twitter is one of the most crucial for the collecting, sharing and spreading of information
Businesses use them to gather feedback from customers through their tweets about a certain topic.
Also to share information about their business on a global scale
Competitors can then see how that business compares to them and customers are given the same opportunity; they are able to compare businesses side by side and how they operate online.
"A hashtag is simply a way for people to search for tweets that have a common topic."
Promotion and Twitter (cont.)
Businesses, often seen with online clothing stores, also often do giveaways where users are told to share and distribute a certain image or link so that they way win a prize.
This method means the link or image would be distributed and seen by many potential customers quickly with minimal cost to the business.
Businesses can easily gain attention and popularity through online promotion of products
If someone was to have a complaint about the business, they could tag the business on Twitter or any other social networking sight.
Any current or potential customers could see it and it would alter their current views on the business and give them a negative reputation
If this negative reputation starts it can be easily spread online and once it is online and shared the business may find it hard to recover
Customers can also be vary of businesses that operate solely online
They may see the promotions/giveaways as scams or may see then as fake
Internet Commerce. (2014). Retrieved from http://www.businessdictionary.com/definition/internet-commerce.html#ixzz3DuzO8GEq
The Networked Economy. (2014). Retrieved from http://www.ariba.com/about/the-networked-economy
Kricfalusi, E. (2014, 25 September). The Twitter Hashtag: What Is It and How Do You Use It? Retrieved from http://techforluddites.com/the-twitter-hashtag-what-is-it-and-how-do-you-use-it/
About Twitter. (2014). Retrieved from https://about.twitter.com/
Twitter. (2014). Retrieved from http://mashable.com/category/twitter/
Shefrin, H. (2013, November 8). Retrieved from http://www.forbes.com/sites/hershshefrin/2013/11/08/why-twitters-ipo-was-really-a-failure/
Twitter hits Wall Street with a bang, closing 73 per cent higher. (2013, November 8). Retrieved from http://www.smh.com.au/business/twitter-hits-wall-street-with-a-bang-closing-73-per-cent-higher-20131108-2x4s5.html
Pepitone, J. (2013, November 7). Retrieved from http://money.cnn.com/2013/11/07/technology/social/twitter-ipo-stock/
Ebsary, A. (2012, July 19). Attention Economics & Attention-Tracking Technology. Retrieved from http://blog.adrianebsary.com/attention-economics-attention-tracking-technology/
Network Economics. (2014). Retrieved from http://www.businessdictionary.com/definition/network-economics.html
Sharpie: How can a creative brand drive product awareness with new customers? (2011). Retrieved from https://business.twitter.com/success-stories/sharpie
Promotion and Twitter
Twitter can allow businesses to promote their products in many new ways.
A trend that is now often seen online is businesses paying or giving free merchandise to social networking users with a large follower base to promote their business with the goal of gaining those followers.
The users often tag or give the name of the business to their followers so that they may also view the business's products.
This products are then viewed by many potential customers who see the products being used by the person they are following.
Twitter's IPO [Initial Public Offering]
According to Forbes, 6th of November 2013, was the first day Twitter became a public company. Twitter's stock price was set at USD 26 a share. The very next day, the stock price went up to USD 45.10 marking a 73% pop above its initial public offering price, and peaked at USD 50.09 a share and later closed at USD 44.90 a share.
was the term used to describe Twitter's stock closing above offer price on the first day. Twitter was high in demand and it created a dot com bubble. Later, Twitter had to work much harder to meet their share price expectations. With the mass amount of users on Twitter (271 million active users and growing), Twitter is expected to be able to reach profitability by delivering ads in the form of promoted tweets and from its data analytics.
In their latest financial report, Twitter managed to generate $312 million in the second quarter.
Twitter's CEO stated that they were focusing on driving increased user growth and engagement.
With this number of active users, Twitter was able to gain $277 million from their total advertising revenue in Q2 2014.
81% of the total advertising revenue was generated from mobile advertising in Q2 2014.
Revenue gained from advertising per thousand timeline views reached $1.60.
In the second quarter:
Average monthly active users reached 271 million.
Mobile monthly active users reached 211 million.
Promoted Tweets can be targeted based on gender, interests, language, location, device, and when users search with relevant keywords.
Promoted Tweets can contain hashtags, links to website, and rich media such as picture or video.
Ads will appear once, and can be removed by clicking the dismiss button.
Through the attention economy, the promoted tweets can create engagement with their audience. Individuals may click on the link, retweet, reply, or favorite the tweet.
With the networked economy, promoted tweets can easily disseminate when a single person retweets the tweet.
Promoted tweets may also become the gate for target audience to visit the company's website or other social media pages such as Facebook and Instagram.
It encourages users to follow a brand.
Once a user becomes a follower, the attention economy allows a brand to continue to build their relationship through organic and promoted tweets.
This may lead followers to engage by retweeting, clicking links, and replying to conversations.
Promoted trends consist of the most popular conversations that are trending, marked by hashtags.
This advertising tool coordinates well with the attention economy and networked economy, where users use hashtags to categorize their tweets. The hashtags encourages word of mouth to spread when users use it by actively participating on using the hashtag.
When placed on the promoted trend list, this can help brand to boost conversation, and to raise awareness.
Promoted Tweets' pricing uses cost-per-engagement. Businesses can bid their pricing. They can set up a budget they are willing to spend. An engagement usually costs around $0.50 - $2.00.
Companies can gain insight of consumer behavior and trends from the tweets generated by users. Companies can also target their ads to users based on the Twitter accounts they follow and the keywords they use in the search box. A detailed and specific information about consumers can be obtained from Twitter. Users information becomes a valuable source of income as Twitter can sell this information to brands to target their ads. This another way of how the Twitter economics work.
The Attention Economy
Information shared voluntarily by Internet users is highly valuable for companies.
The attention economy is brought up by the Internet where the ability to capture people's attention becomes important.
Twitter is the perfect case study to explain about the attention economy, as the basis of Twitter is micro-blogging, where people share information about themselves willingly.
Connection becomes a key to achieving revenue in the Internet business.
Twitter relies heavily on network as it connects billions of people together in order to gain profit. Through this economy, information can be easily disseminated to people all over the world.
For businesses in the Internet to operate, the Internet has 2 new economic systems called:
>>show at the top of users’ timelines and
relevant search results
The interlinking of business processes and economic activity through the use of information technology.
Social networking allows cheaper and faster promotion of business products and services that changes the way business promote as it differs from traditional methods such as television, radio and newspaper.
The processes used are much quicker and cheaper
The products are able to be viewed by more potential customers and even by potential competitors
Gathering of information from current and potential customers is also quicker due to the public nature of social networking which means businesses are also to collect information easier unlike older methods such as filling out surveys
The type of information businesses can gather include name, age, location, likes and hobbies as these things tend to be shared on social networking sites; like Twitter
What is a network economy? (2014), Retrieved from http://www.businessdictionary.com/definition/network-economy.html
Attention Economics (2012), Retrieved from http://financial-dictionary.thefreedictionary.com/Attention+economy
Santos, A. (2012). Retrieved from http://www.thewire.com/business/2012/01/twitter-verification-has-pricetag-15000/47210/
Yardi, S., Golder, S., & Brzozowski, M. (2009). Blogging at Work and the Corporate Attention Economy. Retrieved from http://www.redlog.net/papers/blogging_chi09.pdf
Shontell, A. (2013, April 3). Retrieved from http://www.businessinsider.com.au/the-worlds-highest-paid-software-engineers-work-for-these-25-companies-2013-4?op=1#3-twitter-pays-its-software-engineers-an-average-base-salary-of-120768-23
A way to approach marketing that treats a person's attention as a scarce commodity that one must acquire in order to motivate that person to buy a good or perform some act. Attention economics is especially important in advertising; because of the sheer volume of advertisements people see and hear, advertisers must be aware of the need to grab and hold a person's attention.
One of the main reasons businesses set up a Twitter profile is to gain the attention of new customers and to be able to connect with existing customers.
Businesses aim to grasp the buyers attention in various ways such as following them or trying to get customers to follow them
This can be demonstrated through most clothing sites that have a Twitter button in the corner of their official site
If customers follow it, their followers may also see this and may express an interest leading to more followers for the business
Customer attention is a crucial part in business and the way a business presents itself online shows that they thrive on this attention
Most of the actions that are done by businesses online show that they want more customer attention so that their products can be seen
How Sharpie and Twitter Create Attention Economy
Twitter has created conversation through tweets to engage with the audience.
@Sharpie followers retweet and favorite the tweets; the information is automatically shared to the other followers
@Sharpie is paid account, so Twitter make the account show up in 'Who To Follow' list, easily gain Twitter users' attention.
@Sharpie replies some tweets and interacts with their followers, create a connection with the audience.
Twitter gained revenue by getting @Sharpie more followers, worked the internet business through network economy.
The goal of having verified Twitter accounts is to limit user confusion by making it easier to identify authentic accounts on Twitter.
The rising popularity of Twitter over the previous years has encouraged numerous businesses to use it for the selling of their goods or services
Twitter allows for the cheap and fast spreading of information
Customers and sellers can also contact each other in new ways with the use of Twitter; for example, if a customer asks a FAQ, a wide number of people are able to see it rather than the initial customer. This means the business is able to be more efficient as they won't need to personally contact as many customers.
The promotion of the actual product is also a lot easier as they are able to reach a much wider audience.
It is also easier to judge which customers would be interested in the businesses products as the demographic of customers is easily found on social networking and Twitter; this type of information tends to be vital to businesses.
Twitter also allows businesses to have an indication of the position of their leading competitors due to the public nature of the social networking site.
How Businesses Use Twitter
Why 50% Twitter employees are engineers?
To run the platform and ensure everything goes perfectly every day. Twitter hires engineers to run the platform’s internal tools, infrastructure, API, admin, mobile, search, advertisements, mobile, etc.
Engineers in Twitter are so scarce that according to Business Insiders, Twitter pays its software engineers an average base salary of $120,768.
1,000+ new followers per day and positive brand engagement within the audience
How LG and Twitter Create Attention and Network Economy
• Twitter created the trends to gain awareness, so people can easily find out through the Trending Topics; effectively gain more audience. In this case, Twitter and LG has captured their followers' attention.
• Followers automatically spread the words and shared the event through hashtag.
• Hashtag connects one follower with the other followers, made more followers, more tweets and retweets therefore made more profits for Twitter.
A big engagement towards the audience. 50,000 hashtag mentions and 5,000 tweets within an hour.
Twitter is a platform that highly uses the Internet economics, both the attention economy and network economy, to generate profit. Users are a significant factor, contributing towards both the network economy and attention economy of Twitter. Twitter is currently responding toward market opportunities by improving their features and collaborating with other companies to fulfill the market's demand.