Why are investors so excited about Twitter's rapidly approaching IPO? Analysts see it is a significant investment opportunity, perhaps even stronger than initial hopes about Facebook, making the IPO a coming of age moment for the mobile media business.
Twitter is the one of the first online platforms to successfully figure out the mobile advertising equation. Last year the company garnered more than $270 million. Revenue is expected to more than double this year, according to the company's S1 filing.
It's really amazing progress for a company that many people made fun of when it launched. No one believed 140 characters could build a business, and here we are!
Hey, you know the folks at Gravy like mobile! Gravy offers contextual opportunities based on location and permission. Companies use Gravy to promote deals and promotions for in-store traffic and sales. So for us, Twitter's IPO is a validation moment for mobile marketing.
Mobile ads make up more than 65 percent of Twitter's revenue, positioning it the leader in the mobile space. That's an important differentiation point for Twitter, as both Facebook and Google are giants in traditional web traffic, but are struggling to develop strong mobile platforms.
Twitter's mobile ad platform takes advantage of the mounting mobile revolution. Consider that 91 percent of Americans have mobile phones now, and are using them in a variety of ways, including messaging, Internet access and applications.
Mobile access will continue to expand as wearable computing takes off over the next few years. Whether people take to Google Glass or another variant of wearable computing, these devices undoubtably represent the next evolution of mobility. They will bring an unprecedented use of personal contextual media based on location, consumer permission, and data-driven information.
And Twitter figures to be a part of the ongoing mobile revolution both from a media perspective and as an advertising platform. Imagine being on the road and you're hungry. Now you are able to dictate a tweet to your wearable computer and ask your community for local restaurant recommendations. Your answers are read back to you. And perhaps a sponsored Tweet is, too.
Expanding Mobile Advertising
Increasing consumer reliance on mobility will force marketers to address the mobile opportunity. In 2014 mobile advertising is expected to reach more than $11 billion. eMarketer says mobile will eventually surpass traditional web advertising.
There are a variety of ways for companies to participate in mobile, including apps, content sponsorship, custom deals, native advertising, text, and visual ads. Twitter offers a variety of ad packages, such as native ads, featured accounts, and unique content packages via its Amplify service.
Twitter's mobile advertising strategy includes an aggressive approach to move beyond its own native platform.
Twitter announced a deal last month to buy mobile-ad startup MoPub for about $350 million. MoPub will allow Twitter to expand its mobile advertising platform to other sites, creating a network of ads similar to Adsense or AOL. The difference is in the mobile factor.
The MoPub ad deal represents an attractive buy for the company's future with analysts and media taking a liking to Twitter. In the end Twitter may not be the biggest social network, but it may be the best financial investment.
One thing is for sure. We can expect Twitter to lead in the development of mobile media as a strong marketing opportunity. What do you think of the mobile opportunity?
About Geoff Livingston
A former journalist, Geoff Livingston continues to blog, and has authored four books. Most recently he published his first novel Exodus in 2013, co-authored Marketing in the Round, and wrote the social media primer Welcome to the Fifth Estate.
Professionally, Geoff has advised more than 10 members of the Fortune 500, including AT&T, Cox, eBay, Ford, General Dynamics, Google, PayPal, Pepsi Co., Procter and Gamble, SAIC, Verizon and Yum! Brands. He has also advised numerous start-ups, mid-cap companies, and nonprofits, including United Way of America, Live Earth, The Case Foundation, Razoo, Environmental Defense Fund, the Philanthropy 2.0 Project, Tekelec, Network Solutions, Vocus, the Washington Nationals, and Sully Erna (Godsmack lead singer).