Will Big Data Become Twitter's Source of Revenue?
Twitter, the little blue bird social media company, has around 284 million monthly active users who are responsible for over 500 million tweets a day. Not bad for a company that’s only been around eight years. While many of you are most likely familiar with the 140-character message social media platform, you may not realize they’ve been coming under fire lately.
As is common for most social media companies, Twitter is struggling to explain its financial strategy and business model. Twitter may have access to millions of people who tweet everyday, but many often question how they monetize their service when the majority of what they offer is free. For the most part, Twitter has relied on advertising. You’ve probably seen those promoted tweets on your feed from time to time. Companies looking for more exposure can pay to have their tweets appear in people’s feeds, whether or not the user follows them. However, a dwindling user base has investors worried that an advertising approach may not be enough.
Twitter doesn’t seem worried and is convinced they have a profitable strategy in place. Adam Bain, president of Twitter’s global revenue, has recently turned attention towards another line of revenue that could be very profitable, and meets the current demands of almost every industry. The solution is data. Bain is confident that Twitter can grow its revenue from licensing the data generated by all its daily users.
Big data analytics have become the latest must-have business tool. Big data refers specifically to the different data channels and sources available to organizations. Advances in technology and the digital age have increased the number of these channels, and the sheer volume of data, hence the name big data. For businesses, big data provides insights into customer needs, preferences and demands. It also allows companies to determine variables that may affect decisions, like time of the year, pressure from competition, or advertising and marketing techniques. Companies that are able to find the right insights are able to build predictive models, and increase the likelihood of building successful strategies.
This is where Twitter is hoping to benefit. The simultaneous rise in big data and social media is no coincidence. The plethora of social platforms has provided marketers and researchers a completely whole new line of sight into consumer habits and perspectives. Everyday people of all ages from all over the world share their likes, pet-peeves and anything in between. Companies that pay attention can use this information and recognize trends based on the conversations people are having online. Twitter features users that share perspectives and comments on almost anything. If businesses are smart and able to pick up on the right discussions or sentiment, they can develop specific marketing tactics or business solutions to meet these needs. Competition for this type of information is growing, which is good news for Twitter.
Access to this information has already proven to be beneficial, as proven by a few industries already investigating the right techniques to gain an advantage. For example, analysts in the financial industry are looking to determine if there are correlations between the overall ‘mood’ on Twitter and fluctuations in the stock market. That’s not too surprising. So much of the market depends on trust, so if the right influencer posts something positive or negative, it could really influence behavior.
The U.S. Federal Government is even investing in big data analytics for Twitter, hoping to crack down on hate crimes. Unfortunately, hate crimes continue to be a major problem in the U.S, with nearly 6,000 incidents reported in 2013. The Government is hoping insights from twitter will help identify regions that tend to have higher instances of hate speech. From there, authorities could focus their efforts on improving awareness and outreach programs to combat the problem.
It remains to be seen if Twitter will switch data licensing with advertising as a primary source of financial revenue, but it’s almost certain that with the growing popularity of big data and big data analytics, this will remain an important source of revenue for the social media giant. The question now is whether or not businesses will get on board and recognize the advantages of a big data strategy.
(Article and body image via Social Media Today)