Marketing & Advertising Magazine

The Long and Winding Road: A Little Bird Told Me….

Posted on the 08 October 2013 by Scotcombs @3rdplanetmedia



A little bird told me…


The impending IPO for Twitter raises some interesting questions as to our capacity for abstract business. Looking at this IPO offering, with Twitter ‘only’ losing around $69million in the first six months of the year, one could easily be forgiven for thinking that IPO stood for ‘Incredibly Positive Outlook’! Twitter has never made money yet we are racing to the party in the hope that this time we can get a better outcome than the underwhelming Facebook IPO last year.

Twitter will make money, of that there is little doubt, probably bucket loads but at what rate and for how long? Many of us forget that it is not alone in the marketplace and will undoubtedly have additional competition as time goes on. China has the largest online community in the world and is also the home of ‘Weibo’, their version of Twitter… and Tencent and……RenRen and……Peng You ……in fact lots!

The ace in the pack, at least in Western investment logic, is that Twitter was conceived as a mobile platform and as such has maximized its advertising revenues by garnering 75% of such funds via mobile usage. Facebook had not, at the time of it’s IPO, worked out the mobile landscape for advertising and therefore lost an opportunity in that department.

Furthermore, Twitter is careful that its advertising is discreet, allowing companies to promoted in three ways. Promotion is by placing in a timeline, supporting a trend or promoting a whole account but the essence of using Twitter must not be hampered by these activities.They correctly believe that if advertising gets in the way of the user experience not only will it detract from the users experience but that ultimately it will cause a drop in users and become unattractive for advertisers.

My concern is that we appear not to have learnt too much from other abstract offerings in the past, we seem to be hard-wired to get excited about the potential future profitability of loss making businesses. There are many other profitable businesses that represent excellent investment opportunities yet they remain underfunded, perhaps they are not representative of the ‘Zeitgeist’ !

Take a moment to watc
h this interview from a couple of years ago giving an outsiders view of Twitter and comparing it to the Chinese social sites like Tencent and Sina Weibo….


Interesting huh?

If you would like to learn a bit more before you plunge all your savings into Twitter,have a gander at this,


see  you on the long and winding road…….. Patrick

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