Twitter’s impending IPO has not been announced yet, but it must be on the mind of every venture capital group and partner who decided to pay into Twitter in the early stages and every investor desperately awaiting to buy and sell shares in the popular microblogging platform.
However, the company still has an anti-government, anti-ads and real startup like attitude to most problems. Even though Twitter has apparently been preparing almost $1 billion in revenue this year, we cannot see the company really pulling in that much money this year, especially when they have neglected real advertisement innovation.
Twitter’s Advertising Potential
Twitter has lots of advertising streams it could go down, but has not tried yet. The only two really working right now are promoted hashtag trends and promoted hashtag tweets. There could be better ways to utilise these promoted tweets, like Facebook’s way of doing it.
The main product here is brands and users, for Twitter, the ultimate goal with advertisement would be to sell the user a product through brand recognition and advertisement. We have seen this done on Facebook and Instagram, where brands will offer free samples for a follow or like and set competitions to make sure everyone keeps watching the brand.
This is a clever and indirect way of getting the user involved with the brand, it also makes the brand more user-friendly, because the admin of the Twitter account is handling questions and keeping the humour up. We have seen Taco Bell, Oreo and other Twitter accounts try to keep the comedy up, further promoting their brand and trying to bring a more customer friendly approach.
If there was some way for Twitter to grab this brand recognition and make it into revenue, it would be huge for the company revenue and may extend Twitter’s brand reach to rival Fancy and Pinterest.
With Facebook’s disastrous IPO, we cannot see Twitter being true fruitful either, especially if they bet big on being a hugely successful company like Facebook did. We remember pre-IPO many were building Facebook up to be a $100 billion company, this has decreased as the stocks failed to grow.
Twitter are going for about a tenth of that number, apparently looking for a $10 billion valuation on the IPO. This is a huge step from the $1 billion acquisition companies we have been seeing recently, but with Twitter’s huge userbase, currently at 300 – 400 million and its news and advertising potential, it boosts past other players in the field.
While Tumblr, Instagram and WhatsApp may have incredibly larger userbases as well, they did not have any revenue streams. Twitter has a big one, but they need to find ways to really create organic revenue as Google and Facebook do, to really become a big league company.