Is Twitter too loud in consumer markets?

Author: Countries and Consumers

Date published: 3 Jul 2009

Twitter tracking tool Twist reports that at least 30% of Tweets currently contain tributes to Michael Jackson. Twitter is the most talked about online development of the moment and offers real-time insight into consumer views and behaviour.

Usage rates are soaring, and it has attracted massive publicity in providing consumers worldwide with a platform to exchange real-time information on hot topics, from the spread of Swine Flu earlier this year, to events right now in Iran in the fall out from the Iranian election.

Twitter has created a new niche in online social networking. It has enjoyed a phenomenal surge in usage and has become the most talked about online development of 2009. Current downsides are played down in the hype. As ever in blockbuster web developments such as this, no-one is sure how Twitter will ultimately be monetarised, either in terms of profits for its own business, or in terms of other businesses finding killer commercial applications on Twitter. For the moment, its growth rates and sheer sense of “in the now” are driving massive interest.

Key trends

Super growth;

Current downsides;

Twitter on the go;

Consumer markets in a Twitter.

Commercial opportunities

Can Twitter itself come up with a viable model to generate substantial income?

Developers to sell low-priced add-on products (sales of Apps, applications for use on the iPhone, have made large sums for some developers);

Consumer brand companies to set up Twitter accounts. Breaking news and fast changing markets look especially well-placed sectors. But beware pointless, spam-like Tweets: “Do your clients and consumers really care that you had an egg sandwich for breakfast? Do your clients and consumers grow their affection for your brand because you've essentially plagiarized and “retweeted” someone else's article?” writes a commentator in Loyalty Marketing;

Celebratory endorsement stronger than ever. Twitter celebrates celebrities;

Twitter is a major new research tool for companies to gauge up-to-the-minute consumer opinions and interests.

Background

Just to summarise, Twitter is a form of micro-blogging and social networking. Its premise is “what are you doing” and its community is given 140 characters to express this in a “Tweet” (an update). You can choose to follow other Twitterers and receive their Tweets (and respond or forward these to others), while others can follow your Tweets. On joining, users usually search out friends or colleagues they know, or famous people, from hi-tech heroes and gurus offering their thoughts on developments, to celebrities offering access to their daily routines.

The latter has given Twitter something of a “low brow” image amongst many observers. For example, the world's most followed Twitterer, US actor Ashton Kutcher, famously posted a picture of his wife Demi Moore in her bikini earlier this year. Following this, in April, Kutcher became the first Twitterer to log more than one million followers. It is numbers such as these that are attracting so much commercial interest – while it is worth noting that the second site to achieve this landmark – less than an hour later – was the respected CNN's breaking news feed on Twitter.

Other key examples of the impact of celebrity on the service include a demonstration to Oprah Winfrey on her TV show, leading to a surge of interest in the USA, and comedian Stephen Fry's adoption of Twitter in the UK, which has introduced thousands of UK consumers to the idea.

Super growth

Growth rates have been truly remarkable. According to Nielsen statistics on American users at home and at work, Twitter received seven million unique visitors in February 2009, up almost 15-fold (1,382%) on the same period a year earlier. This made it by far the fastest growing category in Nielsen's “Member Communities” category (which also includes, for example, Facebook).

Another key element of Twitter's fast growing consumer base is that it has a broad adoption profile by age group. Perhaps surprisingly, Twitterers are not predominantly students or teens. In Nielsen's figures, the largest user group by age was the 35-49 year old segment, which accounted for 42% of the site's audience. The next largest group were 25-34 year olds, with almost a fifth of users (19.6%), followed by 55+ year olds (16.6%). Unfortunately, figures for 18-24 year olds were not available due to insufficient sample sizes.

Another survey from The Participatory Marketing Network (PMN) in May also highlighted low penetration in this age cohort, showing that only 22% of Generation Y consumers are using Twitter – even though 99% of this group said they had a profile on at least one social networking site.

Current downsides

On the other hand, there is an interesting alternative view to the figures. A May 2009 study undertaken by Harvard Business School, based on 300,542 Twitter users, found that Twittering is much less interactive and vibrant than the current hype suggests.

Findings include that:

90% of Twitter content is generated by just 10% of members;

Over half of Twitterers updated their pages less than once every 74 days.

The implication is that many consumers do not really buy into the service once they try it, leaving a large part of the content to be generated by a relatively few intensive Twitterers.

"This implies that Twitter resembles more of a one-way, one-to-many publishing service more than a two-way, peer-to-peer communication network." (Study team blog post.) In short, it appears that a core of super users is creating content for a large audience of passive members.

It is also displaying somewhat anachronistic male/female behaviour patterns. The study found that despite there being marginally more female than male users, men had 15% more followers than women, and a man was almost twice as likely to follow another man as a women. On other social network sites, men tend to be more drawn to female pages, though these sites also usually include pictures and biographical information, which tends to add to male interest.

Twitter on the go

Twitter's up-to-the-minute reporting of events seems instantly more compatible with mobile technology than PC web access. You update from your mobile phone and read updates on your mobile phone.

It's worth noting that this is an issue outside of the USA at present. Anyone can update their Twitter account by an SMS text message from a mobile phone. However, receiving SMS Tweets on a phone has largely been a North American experience.

Last year, Twitter had to pull this send/receive text service in Europe, as it was effectively covering the cost of sending text messages to its users' lists of followers, which was unsustainable. In March, it announced a deal to recommence this service for Vodafone UK customers, who can now send and receive SMS Tweets simply as part of their normal messaging bundle. Twitter is continuing to negotiate with other cell network operators around the world to provide similar coverage.

Incidentally, the main issue between the USA and Europe here is that in the USA the consumer pays for both sending a text and receiving one. In Europe, you only pay for sending a text. A service such as Twitter potentially sends vast numbers of texts to update its users' followers – thereby paying for texts in Europe that followers receive for free.

Finally, it must be added that being outside of the USA or not on a Vodaphone UK subscription, does not of course prevent mobile access to Twitter. The site can be accessed via any phone with a mobile web connection, and many value-added Twitter-related applications have been developed for the iphone and other smart phones.

Consumer markets in a Twitter?

Twitter offers a real-time peek into consumer views and behaviour around the world, which is likely to be a vital resource for consumer marketing businesses.

The first commercial question is over the viability of Twitter as a successful profit-generating business. As with many online start-ups, the future business model has still to be defined.

In terms of consumers, it is also the case that blatant revenue generation by Twitter or Twitter members will be seen as inappropriate to the space and uncool – and likely to be treated in a similar way as for example e-mail spam.

On the positive side, it has of course demonstrated the sheer pace of growth made possible in today's digital marketplace.

And it has re-confirmed the more traditional potential of strong brands and celebratory endorsement. Usage by high profile figures has for example significantly accelerated take-up in the consumer market in general, as Twitter offers a personal link to the thoughts and lifestyles of the famous.

With celebrities able to attract large Twitter audiences, this has follow-on potential for their own products (films, books, magazine columns, music – including any brands they are signed up to promote).

At the same time, companies can benefit by disseminating information to an audience of “followers” – customers or potential customers who choose to follow the company's “Tweets”.

More specifically, newspapers and other media groups can provide news alerts to their Twitter followers, creating a new digital media channel for their content.

Hence the current rush for companies to set up Twitter services is now reminiscent of the urgent – and often ill-thought out – surge to set up first websites a decade ago.

Finally, Twitter search also has a unique advantage for companies – in that it provides a very up-to-date, virtually real-time, insight into what consumers are saying about a vast array of topics, around the world. This is already a practical new research tool for any business involved in consumer trends.

Outlook

“I like the fact you can get news sometimes before it hits the news! You can talk to people that you would otherwise not get the chance to. It's a way of expressing an opinion without just going around talking to yourself and you can find others who think the same.” UK contributor to a BBC blog

One of the big advantages of Twitter is its immediacy. It really is all about the now. Twitter's very nature means that you read what people are saying in the moment, and its system of collating relevant Tweets means that a user can instantly view opinions around the world regarding hot topics. Topsy Labs Inc, for example, was founded in 2006 and in May 2009 launched its Topsy search service for Twitter's Tweets (Topsy.com). Its approach highlights aspects of the new medium: “Topsy doesn't think of the Internet as a collection of documents. Or even a web of documents. Topsy sees the Internet as a stream of conversations... Topsy indexes what people are talking about rather than Page Ranking.” As part of this, Topsy gives weight to the “influence” of users, who are deemed influential by number of followers – in the same way that Google's Page Ranking is affected by the number of links to a page.

In comparison to Twitter's focus on real-time information, Google tends to give high rank to well-established web pages of any date which have attracted links from other sites etc. (The Google News feature at the top of search results does, however, try to address this by offering latest news stories).

In this one respect alone, Twitter is a new information tool for any consumer marketing company, providing insight into consumer views and trends around the world.It is perhaps this advantage – and not just the eye-boggling growth in subscribers – that is driving up Twitter's valuation, which is already reported to have included a rejected offer of US$500 million from Facebook.

Countries and Consumers