Twitter, the social media microblogging phenomenon, announced on Thursday that they have filed for an initial public offering. That’s right; Twitter is going public.
It’s understandable the announcement raised some eyebrows – even doubt – after the chaos surrounding Facebook’s IPO. Since then, there hasn’t really been much confidence in the tech IPO realm, and the connection often made between Twitter and Facebook isn’t helping bolster anyone’s confidence about Twitter’s decision to go public.
But I think that’s the wrong way to look at Twitter’s IPO announcement, for two reasons. First, Twitter has a unique and unprecedented opportunity to not only learn from Facebook’s mistakes, but also to instill confidence back into the tech IPO realm. Second, imagine the potential impact that Twitter going public will have on the way marketers interact with it as a marketing tool. This could create an entirely new playing field for marketers.
How Will Twitter Monetize?
Going public puts immense pressure on Twitter to create and generate new sources of revenue in innovative and exciting ways. One of the first to demonstrate that in-stream ads are a viable way to make money in the mobile era, Twitter has already shown they can be dynamic and creative. But with the IPO, they’ll have to step it up a notch.
By its nature, Twitter is very different than LinkedIn, YouTube, and Facebook, so it will be interesting to see how they monetize. Already, they’ve done some experimenting – their partnership with American Express, which allows AMEX cardholders to get a variety of deals and discounts from select retailers via Twitter’s online messaging service, is a perfect example. So too are some of the acquisitions Twitter has made. For instance, MoPub, a mobile ad exchange company that helps place ads on mobile apps was bought by Twitter on September 9. This suggests the company is preparing for the transition from private to public; and once it happens, we can only expect their rate of acquisition to increase.
Twitter’s monetization model could span anything from targeting ads based on interests expressed in a user’s Twitter stream, to expanding purchase by tweet initiatives, to taking a percentage of purchases that occur via Twitter. Any way you cut it, there are many potential real time options for marketers to take advantage of.
Advertising: Since going public generally means that profitability in the short-term becomes a very pressing issue, we can count on Twitter to make changes to their advertising mechanisms. Expect to see further integration between acquired platforms like Vine and MoPub with Twitter’s platform, and the potential for Twitter to offer real-time bidding on ads and/or video ads.
Targeting: The IPO also means that Twitter’s focus on monetization will ramp up the importance of in-depth targeting, which presents a great opportunity for marketers. While there are some targeting options currently available, it’s likely that Twitter will begin focusing more on the collection and subsequent monetization of its users’ data. The downside to this? Twitter users have grown accustomed to the platform being a relatively ad-free space and because this is bound to change, significant user backlash can be expected.
When it comes down to it, Twitter going public presents the tech sector and the world of digital marketing with tremendous opportunities. Yes, Facebook’s IPO was tumultuous and chaotic, but it has recovered. And Twitter has the ability to learn from the mistakes of Facebook. I, for one, am excited to see what Twitter will do to monetize real time engagement technology by creating new ways for marketers to interact with their target audiences.