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With a $1 billion valuation, Twitter is becoming, according to Co-Founder Evan Williams, an information network, a practically priceless exchange for connections, information, and the resulting activity that ensues.
Indeed, Twitter appears to have evolved into a human seismograph, a lifeline interweaving people through conversations, reciprocity, and connections inspired by the interests, ideas, passions, causes, and observations that move them.
Twitter’s core and most loyal users are at one with the service. Their daily actions hinge on the availability of Twitter (#whentwitterwasdown) and flourish with every new application introduced to improve the experience. Much more than a social network, the 140 character tweets that populate our attention dashboards lead us on unpredictable paths that connect us to new people and information – changing and evolving every time we log in.
A recent study by ChubbyBrain documented Twitter’s ability to foster a dedicated technology and business ecosystem. According to the report, angels and VCs had invested $23.27 million by June 2009 in Twitter-based startups. Two years ago, there was only one Twitter app. Today, there are over 50,000.
Call it Twitter economics.
Social capital and its ties to the attention and trust economies is earning undeniable prominence and stature in business and social ecosystems. It is earned and measured through our actions and words and reinforced through recognition, interaction, and reciprocity.
In real life and in business, we earn the relationships we deserve. And, the status of social capital is a reflection of our investment in its growth and definition.
The Market for Connections and Conversations
As social media defines the framework that establishes, cultivates, and leverages social capital, individual social networks are simultaneously building exchanges dedicated to defining the systems and values governing network economics. Twitter has created a thriving network economy rich with relationships, conversations, and the empowerment of its users to effectively and successfully build and cultivate communities and nicheworks around its brand and core values in and around Twitter. Simultaneously, Twitter created a dedicated ecosystem for applications and developers by opening up the platform for customization and opportunities.
Essentially, Twitter created an architecture that allows businesses to build experiences on top of it, ultimately creating a Social Operating System (OS) not unlike what Microsoft and Apple created for Windows and Mac.
While at LeWeb in Paris, Twitter’s Director of Platform Ryan Sarver announced that in three years, over 50,000 applications have been registered using Twitter’s API’s. It’s an incredible milestone as just a few years ago, the Twitterverse was populated by 1. It’s also indicative that the Twitter economy is burgeoning. While Twitter itself is finalizing its revenue strategy, developers are already turning profits while facilitating new systems for collaboration, communication, analysis, and entertainment.
Sarver also announced a new leadership program designed to further stimulate and strengthen the Twitter economy (as sourced from TechCrunch).
Twitter’s 2010 Focus:
Transparency: Increasing communication regarding public policy and intentions.
Communication: Actively communicating to include developers in the true state of affairs and technology.
Utility: Continue the expansion of rich and robust APIs to empower third-party developers to thrive.
Profitability: As quoted, “When our partners succeed, we succeed.” Read, “stay tuned in early 2010.
To commemorate its commitment to its developer community, Twitter also announced that it will launch a new online resource center, including status dashboards, tutorials, contacts, etc.
And, to celebrate its vibrant developer community and the applications defining the Twitterverse, Twitter will organize and host Chirp, its official developer conference in San Francisco next year.
Twitter Silences the Skeptics: Now Profitable
For years, pundits debated as to whether or not Twitter would ever turn a profit, mocking the company for its focus on community over revenue. Years of questioning were silenced yesterday as Twitter quietly turned a profit to close out 2009. With very little fanfare, the finances surrounding Twitter’s recent deals with Google and Microsoft trickled into the news stream, largely unnoticed by many.
In October, Twitter signed multiyear content agreements with Microsoft for Bing and Google to make real-time content streams indexable and searchable. It’s estimated that the Google relationship is worth $15 million and Microsoft $10 million – per year. After joining Twitter in September, Chief Operating Officer Dick Costolo served as a key role in securing the search engine deals. As the founder of Feedburner, Costolo had the right connections and the experience. He’s also experienced in monetizing feeds through creative advertising models.
As BusinessWeek reports, Twitter also reduced a bulk of its telecom expenses in order to balance the company’s finances to achieve profitability this year. Prior to earning worldwide stardom, Twitter paid sizable fortunes to telecommunications companies to support the distribution of billions of text messages. Insiders report that this was the company’s largest line item. Prior to the proliferation of third-part apps that enabled mobile tweeting, many users relied on text messaging the service to publish and read tweets. Now that Twitter has gained a position of leverage, every deal was recently renegotiated to drastically reduce costs.
As the page turns from 2009 to 2010, Twitter is readying its initial advertising model and also preparing the roll out of paid commercial accounts that offer premium business services. Even though the company is now profitable, Twitter remains acutely sensitive to the user experience. These new services and programs must not disrupt engagement.
At a conference recently, Costolo echoed this promise, “We want to do something that’s organic and in the flow of the way people already use Twitter.”
2009 was indeed the year of Twitter. For those social economists tracking the growth opportunities and the transactions defining the Twitter index, 2010 will be the year of not only Twitter, but the business of Twitter and its supporting ecosystem as well.
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Forrester recently released a new report tracking the future of US interactive marketing through 2014. Authored by Shar VanBoskirk, with Christine Spivey Overby, Niki Scevak, and Angie Polanco, Forrester predicts that interactive marketing is poised to grow at a 16% compound annual growth rate (CAGR).
Even though interactive marketing will approach $55 billion by 2014, the report also observes that not all industries will keep pace with this growth. Retail and financial services are expected to dominate the greatest share of all interactive marketing. Brand advertisers in industries such as consumer goods however, represent the most notable potential for growth.
Nevertheless, Forrester cautions readers of this report to analyze competitive and industry activity before committing to spend and programming
But while it’s helpful to understand industry spending dynamics, we recommend benchmarking your own spend against companies that are like yours — even if they are outside of your industry group.
To provide guidance to decision makers across a diverse set of industries, Forrester studied search marketing, display advertising, email marketing, social media, and mobile marketing by 11 business verticals.
The overall theme is innovation and sophistication
Highlights from the research include:
1 – Retails and financial services spend the most in each of the verticals examined, accounting for 33% of all interactive spend.
2 – Big offline advertisers are expected to demonstrate the greatest volume of growth including, media and entertainment, consumer goods, automotive, and healthcare firms. It is expected that these industries will grow at a 22% CAGR over the next five years.
3 – B2B interactive investments will remain consistent, representing 9% of the overall interactive landscape. Business services, accounting firms, consultancies, and agencies as well as business trade elements, will grow from $2.3 billion to $4.8 billion in 2014.
4 – As is any research, there is usually a category for “other.” In this report Forrester assembles education, local services, and government in one sliver with online universities, home improvement services, and local and national government to increase spending by more than 20% between now and 2014. This growth is attributed to 1) local advertising options continue to improve; 2) government agencies promote newly online processes; and 3) the competition for online students will increase. In one such example, the University of Phoenix developed its own online ad network to distribute online promotions and coupons as a means for increasing course registrations.
In each of the 11 categories that Forrester explored, the average CAGR over the next five years was 16% with “other” representing the higher end of spending with 23% and lead generation on the other end of the spectrum with 9%. Other high growth industries for interactive marketing spending include:
Consumer Goods – 22%
Automotive – 19%
Media & Entertainment – 19%
Travel – 18%
Health and Pharmaceuticals – 18%
B2B – 15%
Telecommunications – 15%
Financial Services – 14%
One of the more interesting aspects of the Forrester report was the allocation of spend across multiple channels with Social Media ranking either fourth or fifth (out of 5) within the mix. In 2009 interactive spend was mostly concentrated on search marketing – rightfully so as with online customers and prospects, almost everything begins with search.
Other top channels in 2009 for interactive marketing include:
Display Advertising
Email
Mobile (which I can only believe will increase dramatically of the next five years)
In a Forrester report published earlier this year, Social Media spend is expected to increase by 34% by 2014, placing it just behind mobile marketing, but ahead of search marketing. Regardless of industry, the top areas of marketing, whether it’s interactive or marketing in general, for any business, must focus on social, mobile, and also the real-time Web. Thus forming a Golden Triangle engagement.
This post represents only a handful of the insights shared in Forrester’s new report. Please visit Forrester online for the full analysis.
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Twitter continues to explore and appraise long-term revenue models. For the time being, Twitter’s primary focus is to build and nurture a thriving and indispensable community. Equally critical is the company’s ability to steer engineering and marketing efforts towards developers to empower them to extend, evolve, and enhance the overall Twitter experience for the vast landscape of discerning users as well as those new members who have yet to realize its potential.
In July 2009, we were introduced to Twitter’s new monetization strategy. The company veered its attention and resources towards businesses, initially releasing a series of documents and use cases to help companies, large and small, embrace the capacity and techniques for connecting with customers, prospects, and peers directly in Twitter. Then in August, Twitter Co-Founder Biz Stone revealed that the company’s initial revenue would funnel from businesses seeking a more meaningful return tied to performance metrics. Its developers would soon follow, creating dashboards and sCRM (or SRM) systems to scale engagement and monitor key performance indicators.
Now, we are starting to see the plan and the development come into focus. On December 14th, Twitter announced that it was testing features designed for businesses, starting with a service designed to humanize brands and organize team-driven conversations. The company also rededicated its commitment towards building features as well as new APIs and frameworks specifically for business engagement and metrics.
“Contributors” is indeed a step in the right direction. For example, my good friends running the @GMBlogs account can now save precious characters by removing their IDs directly from the tweets – focusing on valuable content instead. The same is true for any number of brands in virtually any industry. Contributors connects people to the people behind brands, facilitating human connections and setting the foundation for invaluable relations and relationships.
According to the Twitter post announcing the project:
The feature we are beta testing is called ‘Contributors’ – it enables users to engage in more authentic conversations with businesses by allowing those organizations to manage multiple contributors to their account. The feature appends the contributor’s username to the tweet byline, making the business to consumer communication more personal; e.g. if @Twitter invites @Biz to tweet on its behalf, then a tweet from @Twitter would include @Biz in the byline so that users know more about the real people behind organizations.
The functionality of contributors will be fully supported by the API and is designed to enhance Twitter business apps, such as CoTweet and HootSuite. It is expected to roll out on a limited basis in BETA to targeted partners and business users to “kick the tires” and provide feedback to improve the service and expedite a formal release. This feature is one of several in development according to the company.
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Social Media•
on November 30th, 2009•
BtoB magazine’s “2010 Outlook” indicates social media marketing will be of rising importance for business-to-business (B2B) marketers.
Website, e-mail and search spending were at the top of the list for online tactics to increase, but social media was not far behind. Six in 10 B2B marketers planned to up spending on social in 2010.
Change in Online Marketing Spending in 2010 According to US B2B Marketers, by Tactic (% of respondents)
Fifty-four percent of respondents currently use social media for marketing. That was up 9 percentage points from November 2008 and about 4 points from June 2009, showing a steady increase in B2B participation.
via B2B Marketers to Increase Social Spend – eMarketer.
Social Media•
on November 30th, 2009•
Previously, I explored the intersection of social media and PR and explained why it is so important communications professionals leverage digital channels. In that post I touched on the following key points:
* Authenticity/personality – the world and web crave it
* It scales – popular brands just get more popular
* Long-term storytelling – build a permission asset
* Leverage – digital PR is your social proofing
* Intersection with SEO – links are by-product
* PR has changed – pull is now more effective
Next I’d like to explore a brief outline of how you can effectively use social media to accomplish your PR objectives. I’ll run through 3 key steps as a primer, however I challenge you to consider a unique entry point for your own brand. The social web is as flexible as you want it to be, and there is no single “right answer”. The following are learnings for how you could potentially approach a social media PR strategy.
via Social Media Category – Online Marketing Blog.
Social Media•
on November 28th, 2009•
SEO for Flash – is it a reality yet?
One of the most common issues for web sites with poor search visibility involves Google not being able to crawl and index a site’s content. Web sites made entirely with Flash are problematic because there are often no links for search engine crawlers to follow or HTML text to copy.
According to the Opera (browser) developer center, somewhere between 30% and 40% of all pages tested contained Flash files representing a lot of content that may not be included in search results or only partially indexed. Despite a large number of sites publishing content using this type of file format, Flash and search engines have been like oil and water. They just didn’t mix.
In the summer of 2008, Google announced it had improved the indexing of Adobe Flash files. Many Flash developers and SEOs across the globe could breathe an optimistic sigh of relief: Text in Flash files was now crawlable.
But what’s the whole story? Can a site be built entirely with Flash and expect to gain the same search benefits as an HTML site?
Consider these 5 points that Google makes in regards to SEO for Flash:
1. Google can crawl and index all of the text content users see as they interact with the Flash file. That’s a big step in the right direction, since ensuring a site is crawlable is the No. 1 SEO basic. A few points to keep in mind concerning SEO for Flash:
via Flash SEO: 5 Tips and Best Practices for Optimizing Flash Websites – Online Marketing Blog.