Mobile Fix: Twitter as an ad medium

Following its IPO, Simon Andrews, founder of Addictive!, asks – amongst strong scepticism – if Twitter can really work as an ad medium.

With a successful IPO behind it Twitter now needs to show it can grow its revenues to justify the valuation.

First up it is adding a whole set of new targeting capabilities for mobile – so brands can now specify the operating system version, device and WIFI connectivity. This should help drive revenues from app downloads – an area that has been very lucrative for Facebook.

And the self serve ad platform can now be used by small business across the UK – anyone with a Twitter account and a credit card can now buy promoted tweets and promoted accounts.

The launch of custom timelines is new for Twitter as they annex a functionality that start-ups like Storify have been pushing. It should be no surprise that Twitter want to control how tweets are used and as they try and build the reach of their advertising we can expect more and more Twitter control.

Of course as they push more advertising there is the potential that users push back. As this commentator points out ads do seem more prominent now that images are allowed and this does change the experience. But not everyone is convinced about Twitter as an ad medium – Martin Sorrell has been sceptical for a while and he explains in this video how he values their engagement data to measure the impact of TV over the potential for advertising.

Next Big Thing?

There is no shortage of candidates for the Next Big Thing, with messaging apps like Line, Wechat and WhatsApp growing very fast. Snapchat is arguably more about messaging than photo sharing and is part of this pack too.

The news they have turned down a Facebook offer of £3 billion cash has surprised many. Talking with the BBC the CEO says he isn’t that focused on advertising and instead is looking at selling added value services. He points to the success of WeChat who make 90% of their substantial revenue from in app transactions and gaming services.

If you consider the ARPU figures for Facebook we looked at last week, you don’t need to sell too many services to exceed the money made through advertising. Facebook make $1.53 a year for each global user from advertising.

WeChat charge users $3 a month for exclusive content from Chinese actor Chen Kun and Line do very well selling stickers. And we now see that the messaging apps are very fertile territory for growing game user bases.

Western games companies like King and Wooga are partnering with Asian messaging apps such as KakaoTalk from Korea. WeChat only started to integrate games in August and already three of the most popular apps in the Chinese app stores are linked to them.

As well as the Facebook offer, Snapchat has lots of investor interest – with WhatsApp owner Tencent offering to lead investment at a valuation of $4 billion. Given the state of the tech IPO market, many think Instagram sold too soon/too cheaply and that is probably an influence on Snapchat.

But as someone once said there are less people who regret selling too early than regret selling too late.

The future of TV

We have seen the future of TV and it costs less than some boxsets.

The Google Chromecast is now on sale at Amazon and Google Play- we got ours from amazon.com but the UK site now has them too. Really simple to set up and suddenly YouTube, Netflix etc is on your big screen.

With all the cleverness in your phone or PC, the TV is just a slab of glass and we really can’t see anyone making a success of smart TVs now. And the opportunity for the new generation of consoles that aspire to be set top boxes must be diminished too.

The big screen experience of TV remains in good health as the advertising demand is pretty stable. But much of the momentum in newTV is from subscription focused companies and many don’t want the cable companies or Sky (who make most of their revenue from subscriptions) to act as gatekeepers.

So Netflix, YouTube, Blinkbox et al are all distributed through the phone and the PC – which hasn’t proved too much of a barrier to growth. But with a simple way of getting your service onto the big screen now available so cheaply, we suspect that growth may accelerate. I’s not hard to imagine Netflix or Blinkbox becoming a reseller of Chromecasts or bundling them with subscriptions.

The BT deal for Champions League football could accelerate this. They have paid £900 million to take the games away from Sky and ITV and BT plan to charge for viewing of most games to get try and get some payback. The big picture for BT is to acquire new customers for their triple play of broadband, TV and phone line. And consequently move people off Sky.

The BT channels have a presence on Sky etc but could we see them pushing a broadband based service too? Paying carriage charges to Sky and letting them see just which Sky customers have chosen to subscribe, has to be an issue for BT.

“Some BT shareholders may have preferred higher dividends and a more peaceable environment,” said analysts at Bernstein, adding that this marked the “crossing of the Rubicon” in the market with “the end of peaceful coexistence in the UK telecom and TV worlds.”

Sound far-fetched? Vodafone plan to use their windfall from the Verizon sale (and more) to invest in content and PayTV – as they move to a quad play (broadband, TV, phone line and mobile)

“We will offer unified, converged, multiscreen services in all countries. What that will look like in Britain I don’t know yet,” Colao said. “We have a new chief executive of the UK starting and they will help develop the strategy…I will be doing a lot of thinking in the next few months about the impact of telecoms companies owning content.”

When the Premier League rights come up for renewal in 2015 we expect that there will be even more players – could Google make a bid then?

GAFA Wars

Remember when Apple kicked out Google maps and launched their own version? There was much derision as the Apple maps were poor and many took it as a sign that, in the post Jobs era, Apple was losing its touch. After a short delay Google launched an iPhone app for maps and got 10 million downloads in just a couple of days.

It turns out out that Apple actually won this little battle. New comScore data shows Google maps lost 35 million users over the year since Apple maps became the default on the iPhone and iPad.

So Apple now has a lot more of the valuable data that maps usage gives – and Google has a lot less. In our work on GAFA and vertical stacks we point out that – bit by bit – Apple is pushing Google out of their ecosystem.

Both Maps and YouTube used to be pre-installed and now neither are. The one bit of Google still baked into iOS is in Safari where Google is the default search setting. If you go look at this part of the settings there are three choices, in alphabetical order; Bing, Google and Yahoo. The tick box against Google is pre-ticked by default.

How long before Apple decide the best user experience would be to leave them all un-ticked or just go with the first one? With one UX change Apple close the door on Google’s prying eyes. And how long before Bing offer a large enough cheque to make it worth Apples while? With one biz dev conversation Microsoft would be a significant player in search again.

It is this sort of thing that makes Apple worth as much as all the old media combined.

This is an edited and abridged version of Mobile Fix – click here to read the full article on Addictive!’s website.