1. Internet Business: Twitter
Thesis Statement
The maturity of Twitter has come about due to the
increase of advertising tools available to advertisers to
target specific audiences and therefore increasing
revenue.
Tahlia Manners, Aru Wade, Andrew Samson, Emily Tan Mei Shan

2. History• Ex-Googler Evan Williams had a start up called Odeo. It was going to be a
podcasting platform.
• Evan asked his friend, another ex-Googler named Biz Stone, to join him.
• Evan and Biz and an Odeo employee named Jack Dorsey decided to create
something called Twitter instead.
• In March of 2006, Odeo had a working Twitter prototype. In July, TechCrunch
covered Twitter for the first time.
• Both Evan and Jack did not know what Twitter really was. They just thought it
was another social network or a new microblogging site.

3. Twitter: A Network and Attention
EconomyTwitter is the prime example of both an attention and network
economy
• The attention economy is the balance between advertisers receiving attention from
online audiences and for those audience to also receive attention from their own content
(Davenport & Beck, 2013)
• The “attention economy motivates participation in peer-produced sites on the Web”
(Yardi et al., 2009). The more a person’s Tweets are noticed, the more motivation they
have to continue tweeting.
• These days, “Businesses can no longer simply buy their customers’ attention, but instead
they have to earn it” (Honigman, 2014). This is why advertisers are finding new ways on
Twitter to promote their product in an engaging way to receive attention (e.g Oreo “You
can still dunk in the dark” Super bowl ad)

4. Twitter: A Network and
Attention Economy
• The Network economy consists of the “highly interactive, real-time connections
among people, devices, and businesses” (MIT Technology Review, 2014).
• Amalgamation of human collaboration and interaction and frictionless commerce
(MIT Technology Review, 2014). Has strengthened with the increase in technological
devices to support even greater connectivity and more networks.
3 Pillars of a Network Economy
Earning Customer Loyalty
Enabling Open Innovation
Enhancing Resource Optimization
• Twitter incorporates these three pillars in its advertising mechanisms, connecting
advertisers to users.

5. Competitors
Twitter’s mega revenue streams are unmatched and continuously increasing
(advertising, brands joining, and investing in startup companies) there isn’t direct
competitors however competitors are catching up, below are list of few companies
generating impressive revenues
• Facebook : Social networking service founded February 4 2004 by Mark Zuckerberg
(Facebook reported second-Quarter revenue of $2.9 billion, significant increase of 61%
from $1.8 billion year ago. Mobile advertising grew 151%)
• Instagram : Online sharing, mobile photo-sharing, video sharing and social network.
(Bought by Facebook for $1 billion, it has a revenue potential of $500 million a year)
• Yammer: Private social network that employees elaborate across departments, locations
and business applications (yammer acquired by Microsoft for $1.2 billion, Yammer
generates $250 million per quarter)

6. s of Twitter: Campaign
management
• Twitter helped Barack Obama become the first black president of USA.
• In 2008, Barack Obama (@BarackObama) used the Internet to successfully
reach voters and organize supporters in ground breaking ways.
• The President used digital platforms like Twitter to stay connected with
Americans, share personal and policy insights
as well as respond to breaking news in real time.
• In April of 2012, the President announced
his re-election campaign in a video
titled “It Begins with Us”
posted on his website.

7. • Twitter took the limelight when the Iranian government barred journalists
from covering the 2009 elections.
• A Lot of criticism of the lack of Iran related coverage on CNN but Twitter kept
the world updated in real time on what was happening
• Young Iranians went on Twitter to tweet what’s going on to the world.
Iran elections: Twitter Revolution.
• Twitter is becoming an outlet for news as well despite it being a 140 word
character maximum microblogging site, it succeeded at grabbing the
attention on those who love reading news.
Uses of Twitter: Political
Activism

8. Revenue and Monetisation of
Twitter
• After 7 years of operation, Twitter is worth more than $18bn.
• Twitter has approximately 232 million monthly users, but the
company is not profitable - yet.
How does Twitter make its money and how can we
explain its high valuation?
• 85% of revenue comes from advertising which has increased 129% on a year to
year basis
• $277 million profit in the second quarter financial report of 2014
• Twitter charges its advertisers according to the amount of interaction their
content generates.
Engagement rate formula:
n u m b e r of re p li es + n u m b er of re t wee t s/ b y t h e n u m b e r of
f o l lo wer s X 1 0 0

9. Growth Factors
• Key growth driving factors=spike in user engagement, the number of unique visitors
and mobile traffic (Sikka 2014) on Twitter.
• As a result, company shares rose by 29% in the second quarter report for 2014 (Goel,
2014)
• “Twitter's staffers share more detailed analysis of user data to help with ad
campaigns” allowing advertisers to further identify their audiences. (Koh &Vranica, 2014)
• "One of the advantages of Twitter for marketers over traditional display
advertising is they have worked really hard to make sure that advertising on
Twitter is not interruptive," which attracts a greater user base due to the non-
invasive advertising. Lara O'Reilly, senior reporter at Marketing Week

10. Analysis of Advertising Techniques
Twitter enables advertisers to target an audience based on a variety of factors,
including a user’s ‘Interest Graph’. This graph is created from data such as,
users followed and tweet creation and engagement.
Mobile Advertising
Twitter’s advertising appeal comes from a combination of:
• the large user base
• the active nature of said user base
• and its integration into a wide variety of devices
This equates to ad’s reaching over a billion devices, creating more than 130 ad
requests per month.
These statistics plant Twitter as a leading competitor in the attention economy
of the internet.

11. Analysis of Advertising Techniques
Promoted Tweets
For a fee, Twitter will integrate tweets into relevant users timelines. This is done with the
goal of providing a service to:
• Drive website traffic by asking users to click on your best content
• Offer coupons and deals in the copy of your Tweets
• Drive leads using Lead Generation Cards
• Promote sales and giveaways
Promoted Trends
• Created as an extension of the promoted tweet.
• Trends are utilized by advertisers who want greater control over their campaign.
• Grouping together relevant tweets and integrating it into Twitter’s pre-existing list of
trends.

12. Why Twitter
targets companies to
advertise during major
sporting events: Case
Study
1 5 0 m i l l i o n t w e e t s @ 2 0 1 2 # L o n d o n O l y m p i c s
3 2 . 1 m i l l i o n t w e e t s @ 2 0 1 4 # F I F A W O R L D C U P
2 4 . 1 m i l l i o n t w e e t s @ 2 0 1 3 # S u p e r B o w l

13. PromotedTweets:2013 SuperBowl
• 20.9 million Super Bowl-related tweets were sent during the game, nearly 30%
were about the ads (Indvik, 2013).
• Procter & Gamble opted for creating 22 Vines and related tweets for their
product Tide, joking on other brands' ads involving messes that Tide could
clean up and using the promoted tweet #GetsItOut
• The real-time aspect allows Tide to release
this picture via Twitter which generated
3.6 million impressions via thousands of
retweets.
• “engaging consumers with "authentic
brand content at a relevant time." (Neff, 2014).

14. • Oreo “you can still dunk in the dark” promoted tweet reached out to 3
million Twitter users.
• Received 15,700 retweets was favourited by 6,500 users.
• Helped to attract 7,700 new followers for Oreo
• Using the cost per engagement formula, Twitter earned $495
from each new Oreo follower (Indvik, 2013) from advertising fees.
PromotedTweets:2013SuperBowl

15. Promoted trends: FIFA World Cup
• Twitter held an event to auction off Promoted Trend Packages 11 months
before the commencement of the event.
• Currently, global promoted trends are costing between 150,000- 200,000 US
Dollars
• Increased to $600,000 for the World Cup
• Gold, Silver and 2 Bronze packages for the 2014FIFAWorldCup
• Gold package: six promoted trends to run on six days, including the dates of
the final game and one of the semi-final games =$3.6 million (Delo, 2013).
• All together, the reserve price of the four packages comprising of 16
promoted trends is $8.16 million (Delo, 2013).

16. Premium Days• Increases the cost of all advertising to improve revenue on days where
user engagement is expected to be high.
• “During the Nov. 6, 2012 American Election Day and other key days
during the presidential race, Democratic and Republican marketing
teams purchased the Promoted Trend for more than the normal
$120,000” (Heine, 2013).
• This was used during the Super Bowl and the FIFA world cup where
Promoted Trends increased 600,000 dollars and promoted tweets
increased to 200,000.

17. Promoted Videos
• Launched this year in August in response to Twitter’s public listing.
• Twitter will sell Promoted Videos on a cost-per-view model, charging
advertisers when a video ad begins playing.
• Tested with the 2014 Tour De France where sponsor The Specialized
Bicycling Components, had success with the first tested promoted video
(parish, 2014).
• “Powered by Promoted Tweets, broadcasters reach new audiences and
open up new business lines. Brand advertisers get, for the first time, an
integrated cross-platform tool for reaching the social conversation
wherever it happens” (Twitter, 2014)

18. Twitter’s Investment: Vine
• Vine is a video sharing-editing company acquired by Twitter in October 2012
• Twitter reportedly paid $30 million for the acquisition.
• If this video services was launched with Twitter it would have had plenty of
competition from other video sharing services like Viddy, Keel and Tout)
• Twitter’s strong following provided a quick exposure of this to app to users.
• A risky investment by Twitter however on January 24th 2013 Vine was officially
Launched as a free App for IOS devices and later released for Android.
• This has further expanded twitter’s revenue and market share and has matured as a
successful internet business with an expected 2014 third quarter revenue total
between $330- $340 million.

19. Conclusion“The maturity of Twitter has come about due to the increase of advertising tools available
to advertisers to target specific audiences and therefore increasing revenue”
These tools include
• Promoted Tweets
• Promoted Trends
• Promoted Videos
• Premium Days
• Mobile Advertising
How do they target
specific audiences?
• Push notifications
• Selling user activity to
advertisers
How this has increased
revenue?
• Major international sporting
events e.g FIFA World Cup,
Super Bowl and Tour De
France
• Attracts high user
engagement rates due to
real time marketing

20. References
• Bloomberg News (2014) Twitter Going Public: Inside Their Revenue business [video file]. Retrieved from
https://www.youtube.com/watch?v=T9DOuYq1bEM
• Davenport, T. H., & Beck, J. C. (2013). The attention economy: Understanding the new currency of business. Harvard
Business Press.
• Delo, C. (2013). Twitter Is Already Selling World Cup Promoted Trends. Advertising Age. Retrieved from
http://adage.com/article/digital/twitter-selling-world-cup-promoted-trends/243018/
• Goel, V. (2014). World Cup Gave Twitter a Big Burst in Traffic. The New York Times. Retrieved from
http://www.nytimes.com/2014/07/30/technology/twitter-quarterly-earnings.html?_r=1
• Heine, C. (2013). Super Bowl Wednesday; 5 Brands Still Buying Twitter Ads. AdWeek. Retrieved from
http://www.adweek.com/news/technology/super-bowl-wednesday-5-brands-still-buying-twitter-ads-147087
• Heine, C. (2014). Twitter's Promoted Video Details Are Coming Into View. AdWeek. Retrieved from
http://www.adweek.com/news/technology/twitters-promoted-video-details-are-coming-view-159457
• Honigman, B. (2014). Goodbye advertising, hello attention economy. World Economic Forum. Retrieved from
http://forumblog.org/2014/10/goodbye-advertising-hello-attention-economy/
• Indvik, L. (2013). Ads Made Up 30% of Super Bowl Tweets. Mashable. Retrieved from
http://mashable.com/2013/02/04/super-bowl-twitter-numbers/
• Koh, Y., & Vranica, S. (2014).Twitter's Super Bowl Goal: More Ad Credibility. Commodities control. Retrieved from
http://www.commoditiescontrol.com/commodity-market/dowjonescommoditiesnews/twitteraposs-super-bowl-goal-mor
ad-credibility-20140130DN017007.html

21. • Lunden, I. (2013). Less than 10% of Twitter’s revenue came from Promoted trends in Q2 2013. Retrived from:
http://techcrunch.com/2013/12/06/less-than-10-of-twitters-revenues-came-from-promoted-trends-in-q2-2013-sec-filings-reveal/
• MIT Technology Review. (2014). The Networked Economy promises to transform just about every aspect of how people live and
work. MIT Technology Review. Retrieved from http://www.technologyreview.com/view/530241/revolution-in-progress-the-
networked-economy/
• Neff, J. (2014). P&G's Tide Spent Super Bowl Talking About Others Ads. Advertising Age. Retrieved from
http://adage.com/article/special-report-super-bowl/p-g-s-tide-spent-super-bowl-talking-ads/291477/
• Parish, W. (2014). More brands can now test out Twitter's Promoted Video. Marketing Dive. Retrieved from
http://www.marketingdive.com/news/more-brands-can-now-test-out-twitters-promoted-video/296952/
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