Jack Dorsey is a busy man. Ill-advisably running both Twitter and Square, with prêt-à-porter aspirations on the side. At Twitter at least, he’s not doing a great job.
The company has a lot to learn about advertising.
Twitter knows that I post in English, mainly follow people who also post in English, that my main interest in the platform revolves around investment, that I live in Vienna but also spend a lot of time in Sydney and travelling around Europe.
Last week, I met with Kevin and Steve in Madrid. In between hunting for bargains, company visits and an investing conference, I occasionally checked my twitter feed. Surprisingly, the advertisements I got were nearly all in Spanish, for products targeted at locals. There were ads for telcos, for IBM cloud services, even an ad in Spanish for English lessons.
This is idiotic. Their advertising algorithms are either:
Run with no concern as to effectiveness for advertisers but rather to grab all the cash possible in the short run, in which case see point 1.
They should know I’m most likely in town for either business or holidays. How about an ad for the Museo del Prado? Or an English ad for a pre-paid mobile card? A tapas restaurant? What about an ad for Chocolateria San Gines, where each plate of churros and bowl of liquid chocolate should come with a side of insulin? It was less than 50 metres from our apartment and Twitter sure knew that.
Failing that sort of localised content, they’d be better off serving up advertisements for big global consumer brands like Coca-Cola, in English. Someone trying to sell cloud services to Spaniards should be irate that they’ve paid good money to get in front of my irrelevant eyeballs.
This is not just an issue for travelling twitterers (twits?), but rather more broadly indicative of a company hopeless at what the internet does best – targeted advertising. When I’m at home in Vienna or Sydney, the ads they serve me rarely hold much relevance.
Twitter has a lot to learn. That is a fact. It is also an opportunity for the company and its investors.
Takeover the logical end game
I’m convinced the platform would be more valuable to a bigger entity like Facebook or Google.
For one, Facebook and Google have relationships with a far greater number of relevant local advertisers. Such advertisements are more likely to lead to an immediate transaction and thus advertisers are prepared to pay higher prices per click/view. Either behemoth could divert localised advertising to the Twitter platform more easily than a standalone Twitter can built that infrastructure from scratch.
Furthermore, the bigger players’ knowledge base goes much deeper. Twitter had no idea my wife and kids were also in Madrid. Facebook knew. Google too. And while I was working, my family was out and about spending. A well-placed ad on Twitter for the dinosaur museum, amusement park or cable car would have been much more likely to generate a transaction for advertisers than any of the rubbish they actually served on my feed. A subsumed Twitter would be better placed to know what to serve up.
And of course acquiring Twitter would add, incrementally at least, to Facebook’s or Google’s knowledge of its own customers that also use Twitter.
During the week, I checked Twitter a few times, Facebook once at most. The 140-character-limited platform still attracts valuable eyeballs and, importantly, often different eyeballs to those glued to Facebook. On average, I’d guess, a good bit wealthier too. But Twitter needs to get much smarter at the revenue generating part of its business, or partner with someone who’ll do it for them.
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