The question of Twitter’s future revenue options is a big one, as the social media platform has a robust data set on its growing pool of users. But Twitter’s CEO is resolute: revenue will come from advertising, period.
In a wide-ranging keynote interview at All Things D’s media conference in Laguna Niguel, Calif., on Monday night, company CEO Dick Costolo said that while the company is tempted to pursue revenue paths such as e-commerce or analyzing tweets for consumer sentiment toward brands, it’s going to maintain focus on its advertising products.
“We don’t feel like we need to add another component to the business,” Costolo said. “We think we can do it with what we already have… We just need to scale it up.”
For Costolo, Twitter needs to expand its ad business in two ways: the number of advertisers with which it works and the geographic markets in which it aggressively sells its ad products.
“It’s growing incredibly well,” he said of the advertising business, in the first sign that “incredibly” was going to be his adverb of choice for the evening. The engagement levels for promoted tweets, he went on, “are incredibly high.”
Costolo admitted that the company still has “a ton of work to do” in honing the targeting and frequency-capping of promoted tweets. But he seemed satisfied in the general acceptance of the advertiser-powered tweets among Twitter users – after initial pushback from users about tweets infiltrated their streams from users they didn’t follow. If there’s been significant outcry from users since the promoted tweets launched platform-wide, “I haven’t seen it,” he said.
During the Q&A session, a reporter asked Costolo if Ad Age‘s report that Twitter would roll out more brand pages this week was true. He didn’t answer the question directly, but he gave an overview of why the company is building brand pages.
“It used to be the case when you came to Twitter and went to @VirginAmerica, that that page looked like a transcript of their customer call center,” he said, noting that the brands that use Twitter effectively as a customer-service tool were being penalized by a user interface that would just display all their tweets chronologically. So that helped inform the decision to create brand pages that allow companies to possess more control over what tweets are publicized and how.
“Let’s allow brands to use Twitter as a customer-management tool… but we don’t have to surface that content front and center,” he said.
Costolo was also asked whether it was accurate that only brands that spend $25,000 would get the next crack at brand pages, per the same report. Costolo ducked the question, at least initially. But Peter Kafka, the reporter who interviewed Costolo, suggested that there was a business case to be made for giving preference to the company’s best advertising clients.
“Now that you say it,” Costolo said, “it sounds perfectly reasonable.”
In a bit of a surprise, Costolo said the company would work hard this year to build a better Twitter experience for those consumers who use so-called feature phones, not smartphones. The thinking is that the company wants these users to familiarize themselves with the platform so that they are already fans of the service when they eventually upgrade to a smartphone.
Costolo also talked at length about how Twitter has become the go-to second screen to accompany TV viewership, citing his own experience watching NFL games on TV while tracking the tweets of ESPN anchor Trey Wingo on his iPad simultaneously. So does this mean Costolo sees promise in social-TV products that encourage users to check in to a specific TV show? Not so much.
“I think they’ll just do it as a function of using Twitter,” Costolo said.
Costolo also sought to calm the global outrage over the company’s new country-by-country censorship policy during the Q&A, complaining in part that the issue is being treated with the same kind of shorthand that has made Twitter popular.
Costolo repeated the company’s justification for the policy change it announced last week: By taking down tweets only in the country where Twitter believes they may have violated local laws, it is making sure the maximum 140-character-long messages are still available to the rest of the world.
Twitter’s reasoning has been mostly lost in a barrage of comments – many from Twitter users themselves – that the company is caving into attacks on free speech, especially in countries with repressive regimes.
“It’s a super complex issue,” Costolo said. “When the news came out, people tried to distill it down to, ‘What did they just say?’ It’s easy to distill it down to ‘Twitter is endorsing XYZ.'”
“It takes a while for the scholars and the people who study these matters to weigh in and start to say, ‘Wait, this is actually a thoughtful and honest approach to doing this and it’s in fact being done in a way that’s forward-looking.’ So we wait for that to happen,” he added.
Costolo also emphasized that if Twitter reacts to take-down requests, it will make public the reasons a tweet is being removed. The company already has 45 people who respond to such requests, including those from copyright holders of music or movies in the United States.
He said the policy wouldn’t affect its stance toward China or Iran, where the service is already blocked completely. – with files from Associated Press
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To read the original article in Advertising Age, click here.
