Twitter is a micro-blogging social network site that allows users to send and receive
140-character messages. Twitter has an estimated 40 million users in the United States
(about 12% of Internet users) and an additional 160 million worldwide (eMarketer,
Inc., 2013c). Analysts peg its 2013 revenues at $545 million, which is nearly double
its 2012 revenue. Investors value the company at $10 billion in 2013. About 60% of
Twitter’s users access the service on mobile devices. Almost all of Twitter’s revenue
comes from pop-ads that appear in users’ timelines (tweet stream), but Twitter also has
many other marketing tools in its quiver. The real magic of Twitter, like Facebook, is
that Twitter does not pay for the 400 million tweets sent each day. They are supplied
for free by active users. Twitter sells ads based on the content of these user messages.
Some analysts believe Twitter could easily become the next Google. See the opening
case in Chapter 2 for more information on Twitter.
Twitter was designed from the start as a real-time text messaging service. Twitter
offers advertisers and marketers a chance to interact and engage with their customers
in real time and in a fairly intimate, one-on-one manner. Advertisers can buy ads
that look like organic tweets (the kind you receive from friends), and these ads can
tie into and enhance marketing events like new product announcements or pricing
changes. Twitter is announcing new marketing tools every quarter in an effort to boost
its revenues and do an IPO in the next year. On the other hand, users of Twitter are
beginning to complain about the interruption of their tweet stream by ads, and there
may be a limit to how many ads users will tolerate. Like other social networks, Twitter
users use the service to send messages to one another, not to shop or purchase goods.