Gabey Goh
Mar 11, 2016

Can Twitter’s 'live connection to culture' keep it alive?

SINGAPORE - If there is one bright spot amidst Twitter’s ongoing woes with Wall Street, it's that advertiser revenue is up and brands are buying in. But will that be enough? The company’s vice president of global online sales, Richard Alfonsi, makes the platform's case.

Richard Alfonsi
Richard Alfonsi

Twitter is just getting started in the Philippines, in terms of on ground outreach and support, but not a moment too soon as the platform has been enjoying quite the rise in popularity.

Much of it has to do with the “AlDub” phenomenon, which the company is describing as the platform’s “tipping point” in the country.

Over 40 million global tweets were recorded during AlDub’s “Sa Tamang Panahon” concert in October last year. That eclipsed the 3.3 million local tweets sent during Pope Francis’ visit in January 2015.

“For added context, the Super Bowl got 27 million tweets,” said Alfonsi. “We launched an experiential space called Twitter City in Metro Manila’s Mind Museum, the second time we’ve done so since launching it at CES earlier this year. I tweeted from the event and it got 1300 RTs and counting.”

In the Philippines, one of the fastest-growing markets for the company in 2015, 69 percent of users engage every day. By comparison, the global average is about 33 percent.

“It really struck me how extreme some of the levels of engagement are,” Alfonsi said, adding that it was his first visit to the country. “The passion and energy around Twitter was just remarkable and exciting to see.”

He noted that the events in the Philippines exemplify the “best way” to think about Twitter, which is a “live connection to culture and what’s happening right now”, be it sports, politics or entertainment.

Wall Street woes

The warm reception in the Philippines contrasts greatly with the company’s standing back in the US, where its recent earnings call and top management shuffle sparked much debate over the platform’s future.

Twitter's total revenues grew to US$2.2 billion, up 58 percent year over year. For the fourth quarter of 2015, the company reported US$641 million in revenue from advertising, up 48 percent year-over-year (YOY) and with mobile accounting for 86 percent of that sum.

The company increased the number of advertisers on the platform 90 percent YOY, reaching 130,000.

“We’ve never felt stronger about the ads business right now,” said Alfonsi. “We’re growing at almost 60 percent YOY. There’s no other online business that’s growing that fast, and we’re very proud of what we’ve done.”

As good as those figures sound, much of the focus was on the user base; Twitter attracted 320 million people to check out its service each month on average, the same figure as the previous quarter. International users made up 254 million.

This figure doesn’t include SMS Fast Followers, people that only use Twitter via text message and typically come from developing-world markets like Brazil and India.  

Alfonsi, naturally, prefers to frame Twitter’s reach differently, pointing out that the platform “has never had as large an audience” that it can make available to advertisers.

“We have 320 million monthly active users, which is what’s reported to Wall Street, but also another 500 million that come to Twitter, but are not logged in,” he added. “Combined with another 700 million that are off Twitter that you can still reach, the total audience we think, is over a billion—and that’s tremendous scale to bring to bear for our marketing clients.”

Out of all the markets in Asia, Japan is where the platform is relishing a rare position as being more popular than the oft-compared-with Facebook.

The company boasts 35 million monthly active users in the world’s third-largest economy as of the end of last year, while Facebook had 25 million monthly active users.

According to a WSJ report, advertising revenue in Japan last year grew at double the international rate compared to a year earlier, with large firms like mobile carrier NTT DoCoMo and Rakuten, Japan’s biggest e-commerce company, among the companies that advertise on the platform.

“I call Japan the ‘crown jewel’ in our overseas market portfolio,” said Alfonsi. “The performance marketing part of the business is also growing quite nicely. App installs is one area of growth, and we will continue to invest in.”

The company is continuing to make changes to its service in an ongoing bid to attract new users, such as changing the “Favorite Star” to a “Heart Like”, lifting limits on direct messages and promoting the topic-focused Twitter Moments.

Asked about a long-time reservation from advertisers about the platform’s “lack of stickiness”, Alfonsi said that this feedback “has a point”.

“Once you curate your timeline and get it locked in, it’s magical but I think it probably takes too much time to ‘get Twitter’,” he said. “That’s why we’re continuing to refine our iconic product, so that users old and new can get to experience that magic.”

When news the company was considering increasing its 140-character limit for posts to 10,000 characters broke, there was much outrage from its core user base over what is seen as a inextricable aspect of the platform’s personality.

When asked about the public reactions to Twitter’s changes of late, Alfonsi takes it all in stride, pointing out that his key takeaway was the fact that people were passionate about the platform.

“I watched it unfold on that Saturday when the news broke about what people thought we were going to do," he said. "There was this amazing uproar with a hashtag to match. My first thought was ‘wow, these people really care about Twitter! You want your user to be passionate and have that fire. That is something to be proud of and something we need to harness.”

Alfonsi pointed out that the company has long followed what its userbase has wanted, with features such as retweets and the @ handle being user-driven before they were formally codified into the product.

“You see people expressing themselves in tweetstorms now and using workarounds where they are taking pictures of large blocks of text," he said. "It’s not really efficient to do that. We want to enable people to express themselves the way they want to, but we’re not going to violate Twitter’s core tenet, which is a compact format to grasp, in a live way, your connection to the world.”

Changes to the timeline and how its algorithms filtered and presented content were also met with much alarm.

While Alfonsi admits that making the platform easier to use for newcomers is one of the company’s objectives, he insists that Twitter will not be making any drastic moves that will alienate users, nor will it move away from the service’s core tenets.

“We’re never going to make changes that really harm the live nature of Twitter, which is what many thought we were going to do, changing the reverse chronological construct and doing a purely algorithmic version that’s going to change the experience,” he said.

Alfonsi insists that the changes to how Twitter’s timeline is presented are merely an expansion of a feature (called 'While You Where Away') that “people love”.

“It brings tweets to the top of the timeline that we know you’re going to like, and we’re expanding that use case,” he said. “And the tests we’ve done are off the charts in terms of response. Brands benefit too, as they get the same organic reach/impressions as before but with higher engagement.”

Alfonsi added that such iterations will characterise the way the platform moves forward; where “in some ways” some of the basic principles will be questioned.

“So trust that we’re going to do the right thing and iterate in a smart way,” he said. “We have some updates in the works that we’re excited about.”

The company is doubling down in the video space, expanding beyond its core product of native mobile video ads.

Its First View product, announced earlier this year is still in the test phase and offers advertisers dibs on the top ad spot the first time a person opens Twitter, for a period of 24 hours.

“There’s another product we’re working on around conversational video, which yields interesting engagement, which is essentially video with an integrated call to action, such as sharing content,” he said. “This changes the game in terms of the earned media that advertisers can get.”

In addition, there is much interest over the company’s other video-centric products such as Periscope and Vine, with Alfonsi adding that work is being done on deeper integration between them and the main Twitter app, especially in how cross-network campaigns can be executed.

For now, the focus is on Niche, a company that connects brands with social media all-stars, which Twitter acquired in February for a reported US$30 million. The company currently does not break out the figures for users on a regional basis for Periscope and Vine.

Objectives and its place in the puzzle

When it comes to Twitter’s place in a marketer’s plan, Alfonsi said it boils down to the objectives the marketer wants to achieve, adding that the platform has long fared well as a touchpoint for branding campaigns.

“We’re now focusing on mid-and lower-funnel goals, things like driving app installs, website clicks and conversion objectives,” he added. “[We're also] exploring the opportunity in direct-response marketing and how we can further enable that, as we see the potential for much growth, especially in Asia where there’s huge demand.”

The company has been looking into direct-response solutions since 2013, and in April 2015, announced the acquisition of TellApart, a company that provides retailers and e-commerce businesses with cross-device retargeting through dynamic product ads and email marketing.

“We’ve just started testing our solutions with three Japanese advertisers, our first outside of the United States,” Alfonsi shared.

Asked for her thoughts about the social platform, Margaret Manning, CEO of Adelphi Digital Consulting Group, said that the digital agency has helped brands take a welcome step toward using Twitter to foster quality engagement and connection with target audiences, to develop a strong brand voice that users recognise and feel comfortable talking back to.

“The good news for Twitter is that some brands have woken up to the fact that the platform can be used as more than simply a broadcasting tool,” she said. “We shouldn’t underestimate the importance of this shift for those service-based or transactional businesses.”

She noted that brands exploring this in the most exciting ways have whole customer-service channels tied into their Twitter accounts, or test new products with their loyal following before tweaking.

“It cuts across social to directly impact on the product they sell,” Manning said. “We remain interested in what the future of Twitter, and other social networks, hold for our customers.”

She added that based on experiences with Singapore companies, Twitter engagement is usually focused on content strategy instead of ads.

“The regional trends here are of interest,” Manning said. “So the two core things we would be looking for from Twitter to increase its appeal to marketers would be more clearly defined demographic information and an even stronger analytics tool set.”

Alfonsi admits that the company could probably do a better job in terms of communicating the range of available tools for tracking and measurement.

“We are definitely investing heavily in measurement to ensure marketers get the ROI that they want," he said. "Part of it is the dashboards we make available to advertisers, and we can certainly refine those."

The company is also working on integrating with third-party products, such as its previously announced partnership with Google, to launch DoubleClick Campaign Manager (DCM) for measurements and DoubleClick Bid Manager (DBC) for ad buying, before the second half of the year.

Alfonsi said the company is committed to ensuring speedy rollout of new ad products and services to Asia, in recognition of the fact that its business in the region is growing at twice the rate of other parts of the world.

But while Twitter races to meet demand from Asia-based advertisers, and continues ongoing efforts to attract new users, the social-media landscape in the region continues to evolve.

In addition to the multitude of Asia-grown social apps, the rise of dark social and the tightening of freedom of expression in some markets are changing the way people in the region communicate.

For example, in Malaysia, top cop Khalid Abu Bakar is using his Twitter account to issue warnings to government critics and to order his subordinates to track and investigate dissenting voices.

In Indonesia, the proportion of active Twitter users has dipped 10 percentage points in the past two years, to about one third of Internet users, according to Global Web Index data.

A Reuters report in February noted that Twitter’s innately public nature, which was once an attraction in Indonesia's highly sociable culture, “became a liability” in 2014's testy presidential election.

Shafiq Pontoh, chief strategic officer at Jakarta-based social-media consultancy Provetic, described the mobilised army by politicians of digital campaigners as a "tsunami" of "black campaigns, hoaxes, prejudice, racism, spam, harassment, anonymous accounts and political action to frame topics, issues (and) spin doctoring."

"Twitter," he told Reuters, "became an uncomfortable place to be."

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