Twitter has been putting a lot of effort into its advertising business, which today is the newly public company’s primary strategy for generating revenue. But it turns out that one of its earliest, lean-back efforts has not proven to be its most fruitful: Promoted Trends generated less than 10 percent of the company’s revenue in the three months ended June 30, 2013.
The detail comes by way of correspondence between Twitter and the SEC, made in the weeks leading up to its first public S-1 report on October 3 ahead of its November IPO. The social networking startup had initially made a private filing with the SEC, courtesy of the JOBS Act, which lets companies with revenues of less than $1 billion file without immediately exposing details of its finances. (Twitter says in its S-1 that revenues for the first nine months in 2013 were $422.2 million.)
Specifically, the SEC requested Twitter to modify its revenue graphs to include “number of ad engagements per 1,000 timeline views” and “revenue per ad engagement” notations, and to additionally specify any other revenue sources that do not require user engagement.
In its response, Twitter notes the following in correspondence from September 6:
The Company respectfully advises the Staff that, in the three months ended June 30, 2013, less than 10% of its revenue was generated from its Promoted Trends product, which is the only Promoted Product for which revenue is recognized on a fixed-fee basis and does not require any user engagement. The Company does not believe that Promoted Trends will have a material impact on the metrics disclosed in the Registration Statement in the future.
Promoted Trends, first revealed in 2010, were a follow-on from the Promoted Tweets that appeared in users’ Timelines. Promoted Trends were one of the company’s first attempts at using an area outside of the Timeline to drive revenues. In February, the price for Promoted Trends was around the $200,000 mark, AllThingsD reported at the time.
In September of this year, Twitter gave Promoted Trends a little promotion of their own, with fuzzy metrics touting how they “produced 22% more conversations about an advertiser,” gave a 30% lift in brand mentions, and a 32% lift in retweets of brand mentions in the first two weeks of exposure.
But, it seems that even with all that, off-piste has remained a marginal product, the runt of the litter to Promoted Tweets and Promoted Accounts. That may also partly explain why Twitter has instead opted to focus on ways of delivering promotions within users’ Timeline streams instead, and continues ramping up with new products, such as the retargeting product announced this week.
The letters between Twitter and the SEC, now listed in Twitter’s public filings, for the most part contain questions about certain details in Twitter’s S-1, with Twitter’s subsequent edits. (“The Company respectfully advises the Staff that it has revised the disclosure on page XX to address the Staff’s comment” appears a lot.) But there are also a few other interesting details in the notes that never seem to have made their way into the S-1 filing.
Another one that caught my eye was about Sina Weibo. In an August letter, the SEC asks Twitter to explain better why Sina Weibo is considered a competitor. This longer explanation, which details Twitter’s concern with Sina Weibo’s international ambitions, also hasn’t quite made it into the S-1 filing we see today (bolding mine):
“The Company respectfully advises the Staff that there are a number of reasons it considers Sina Weibo a competitor even though the Company is not permitted to operate in China,” Twitter writes. “Sina Weibo attempts to offer products and services that are somewhat similar to those offered by the Company, and Sina Weibo has started to offer its products and services outside of China and may continue such expansion outside of China. As such, outside of China, the Company has started to compete directly with Sina Weibo, and expects this competition to continue to grow in the future.
“In addition, Sina Weibo has grown rapidly in China, and has a significant user base and a substantial amount of content on its platform. The Company operates a global platform, and if content is available on Sina Weibo and it cannot be accessed on the Company’s platform, it may reduce the Company’s ability to attract users to its platform.
“Further, the Company may eventually be permitted to operate in China. If the Company were ultimately able to operate in China, it would face significant challenges in gaining users in China because Sina Weibo would already be an established and entrenched competitor.
“As such, the Company believes it is appropriate to list Sina Weibo as a competitor in the Registration Statement.”
What’s also interesting here is that neither the SEC nor Twitter mention Line and Kakao, two other social networking products popular in Asia that do find their way into the S-1. Whether those were later additions, or whether the SEC simply didn’t choose to pinpoint them in its question, is not clear. Although the S-1 only notes the challenges to entering a market like China, Twitter takes a slightly more frank and less guarded tone when communicating directly with the SEC.
(h/t to Zach Seward for first noticing the filings)
Twitter on Tuesday named Nathan Hubbard as its head of commerce.
Hubbard’s appointment to the new position, first reported by Bloomberg, comes on the heels of his very recent exit from Ticketmaster, where he acted as CEO since the 2010 merger with Live Nation.
Hubbard wouldn’t get into the specifics of his new job, but as AllThingsD has reported on in the past, Twitter’s commerce initiatives will likely involve the company’s “Cards” product, an expanded form of tweets that let third parties insert more media-rich content inside of the short-form messages.
“If you think about where Twitter is and the evolution of using its interest data to target users … that’s what the Card product is really about,” Hubbard said in an interview. “The next step down that cycle, to me, is, can we actually lessen the friction to buying? Can we drive the actual transaction via the platform?”
Indeed, Twitter’s president of global revenue, Adam Bain – Hubbard’s longtime friend and new boss – has long spoken about a world where tweets would float freely throughout the Web as standalone “envelopes” of content, with users perhaps able to make purchases via the tweets themselves.
Twitter’s hiring of Hubbard could signal, too, that the company is growing more interested in selling items related to live events, things that obviously make sense, due to the real-time nature of the service. Ticket sales, naturally, would be an easy starting point for both Twitter and Hubbard.
It isn’t clear, however, just how much of the payments flow Twitter will handle itself. Hubbard wouldn’t say whether or not Twitter would handle payments processing, but indicated that it wasn’t immediately likely.
“I wouldn’t tell you we’re becoming a payments-processing company,” he said.
Something worth thinking about: Earlier this month, AllThingsD reported that Facebook was pushing its own new commerce initiative, an effort to simplify mobile purchasing and potentially prove to advertisers that, yes, advertising on Facebook does in fact drive sales.
If Twitter could ultimately do the same by sticking purchasing options into its Promoted Tweets ad product, perhaps it, too, could convince advertisers that their money is well spent.
Hubbard, whose first day at Twitter is this Thursday, expects to do more partnering with merchants and other third parties in the company’s commerce initiative.
It’s been a little over three months since Twitter #Music was launched on the Web and iOS. The release signalled Twitter’s desire to broaden its influence on the Web. To be more. To leverage the ever-increasing number of tweets to disrupt the status-quo.
Yet for all its hype, Twitter #Music has been a disappointment. The mobile app sits patiently in a folder on my iPhone, gathering virtual dust and a sense of increasing irrelevancy. I have no desire to open it. Perhaps that’ll change with a future update, but for now it remains rather useless.
It’s not just me either. I’ve asked friends and family what their go-to app is for listening to music on the move. Spotify, Rdio and the default iOS Music app rank high. Twitter #Music does not.
Admittedly, that’s a small group of people to poll. But a quick inspection of the top free music apps in the App Store tells a similar story. Alongside the apps I just mentioned are Deezer, Soundcloud and Shazam, as well as a bunch of emerging services such as Bloom.fm filling out the top 20.
Twitter #Music isn’t featured. Nor is it in the top 50. Top 100? Nope. Top 200? Nope. At the time of writing, the app sits ranked 285. Ouch.
So why is no-one using it?
The purpose of the Twitter #Music app is three-fold; help listeners discover new music; act as an overlay for playing said music; incentivize the music industry – particularly artists and labels – to continue engaging with their fans on Twitter.
To help users find a bunch of brilliant new records, the app offers five charts with rather ambiguous names such as ‘Emerging’, ‘Unearthed’ and ‘Hunted’. They all sound inviting, but I couldn’t tell you what the difference is between any of the three.
Tapping one reveals a very compact grid filled with tiny square display pictures. Each of them represents an artist and they’re ranked in accordance with their popularity. The interface is pretty terrible though and at times completely bewildering. The various images are the size of my fingernail and reveal next to nothing about the artist or the sort of music they play. Twitter has also chosen to show their Twitter handle by default – rather than the artist’s name – which only adds to the confusion.
Selecting a specific artist then reveals a jarring profile page that tries to blend both their Twitter account and more of these tiny cuboid images. It’s the same story in the app’s ‘Suggested’ and ‘#NowPlaying’ sections. Everything feels unrefined and lacks consistent aesthetics.
Too many alternatives that are just better
Discovering new music should be a visually stunning and frictionless experience. Soundwave, Bloom.fm and even the ‘Discover’ tab in Spotify do a much better job of this than Twitter #Music by keeping their respective interfaces refreshingly simple and uncluttered. Twitter’s mobile app just feels messy in comparison.
Twitter #Music would also be a novel proposition if it offered its own digital storefront or an on-demand streaming service. But it doesn’t do that either. Tracks are either 30-second previews from iTunes with direct store links – another bid to get music labels and artists on side – or only supported with an active Spotify or Rdio subscription.
It begs the question though: why would a Spotify or Rdio subscriber leave their dedicated mobile app for this? There’s no way to create custom playlists, queue tracks or access premium features offered by these more robust and expansive services. The idea, presumably, is to reinforce Twitter #Music’s discovery options by giving users the ability to listen to new tracks in their entirety.
Twitter #Music lacks a defining feature or hook to keep users engaged. It’s an odd blend of ideas that never seem to mesh or offer a significant value proposition to the listener. There’s some potential here though and plenty of time for Twitter to turn it around – but no wonder it’s performing so poorly in the App Store at the moment.
Image Credit: David Ramos/Getty Images
It’s far from a scientific sample, but I noticed a lot of people in my Twitter feed over the past few weeks lamenting a lack of thorough media coverage surrounding the political crisis in Egypt. Certainly, when the George Zimmerman trial reached its apex, one might have assumed things in Egypt had reached a peaceful resolution, given how little news could be found in the mainstream US media.
It turns out that media companies are pretty astute at knowing what their audiences want to see, even if it doesn’t jibe with the smaller but more vocal Twitterati. Turn on your local network news for five minutes and you’ll figure out the formula: If people aren’t interested in a given topic, the media doesn’t spend a lot of time trying to change our minds.
What about Egypt?
Egypt seems to have all the makings of a sensational news topic, with its mass protests, violence, and intrigue. But do Americans really care?
We surveyed over 2,000 US adults over the past few days to gauge how concerned they were about the crisis in Egypt. Here’s how they answered:
Over two-thirds of Americans have some degree of concern, with a full 30 percent characterizing themselves as Very Concerned. Thirty-two percent don’t seem to care at all. When we looked at demographics, we found that women were much more likely than men to be Very Concerned, as were people over age 45, and those with an advanced education.
This doesn’t tell us much, though, without comparing Egypt to other issues. So, we looked at 19 other issues we’ve studied using the exact same question format, like this one:
Most topics we follow on a daily basis (for our long-term tracking questions, we looked at results over the past 3 months), but a few issues were timely, like last December’s Fiscal Cliff. We included a mixture of both for contrast.
To develop a consistent “Concern Index,” we took the percentage of people who said “Very Concerned” and multiplied it by two, then added the percentage of people who said “Somewhat Concerned” (this did NOT take a Carnegie Mellon-trained data scientist). Based on this system, the crisis in Egypt would have a score of 98 ((30% x2) + 38%). Income inequality achieves a score of 115.
Now let’s look at a litany of other issues to see how the crisis in Egypt compares:
What Stands Out?
Let’s first address the elephant in the room. No matter how we sliced our numbers, the public health implications of texting-while-driving (“TWD”) produced the highest concern score. These were all large samples sizes, over 5,000 respondents, reweighted to match the full US adult population. So we can’t argue with the numbers. TWD is a big deal to a lot of people.
The next items on the list should come as little surprise. Health Care and Public Education rank slightly above the Economy and Jobs, but within a thin margin of error. Consumer Privacy has surged in recent months, making it to #7 on the list, just behind Gas and Energy Prices.
It’s interesting to note that issues like last year’s Fiscal Cliff and Bullying in Schools rank so highly above Crime and Violence and Climate Change among the general population. Clearly, these numbers might be different among respondents across the socio-economic and ideological spectrum.
We don’t find the Crisis in Egypt until #17, ranking more highly than only Concussions in the NFL and last summer’s LIBOR interest rate scandal. These are niche topics, to say the least.
If the mainstream media is providing little coverage of the Eqypt dispute, they may know what they’re doing. Our data makes a pretty convincing case that most consumers are concerned more about issues that impact their everyday lives, like failing schools, out-of-control health care costs, tight job markets and, most importantly, that college kid in the car in front of them sending a text to his girlfriend.
The Vatican has taken another step in its efforts to embrace social media by offering “indulgences” to followers of Pope Francis’ (@Pontifex) Twitter account. Italian newspaper Corriere della Sera reports that the church will reduce the time Catholics have to spend in purgatory if they follow official Vatican events on TV, radio, and through social media. One such event is the Catholic World Youth Day, commencing in Rio de Janeiro on July 22nd. The Apostolic Penitentiary, a Vatican tribunal responsible for issues relating to the forgiveness of sins, will award the privilege to the faithful that follow the event using different forms of media. Pope Francis’ followers are not immediately granted an indulgence for tracking the event, with the penitentiary noting that it would hinge on the user having previously confessed and being “truly penitent and contrite.”
Read the full story at The Verge.