Day: February 24, 2014

Twitter’s public life on the Wall Street began when it announced that it filed an initial public offering on the 12th of September, 2013. From then on, Twitter’s moves have been scrutinized to no end and have often been the topic of discussion on most finance websites. Its stocks initially showed a lot of promise but has been on a rollercoaster ride ever since. In a prospectus of 800 pages, it revealed its game plan and how it planned to raise money. With an initial plan of raising $1 billion, Twitter eventually reached a market capitalization of $32.76 billion. In the recent weeks, Twitter’s stock has nosedived mostly because of fears of it not doing well when it comes to advertising. Should technology pundits be worried about Twitter’s market performance? As a technology company, we are more interested in what Twitter can do in terms of technology than what it can do to investors. However, following Twitter’s numbers tells us if we should continue to prefer Twitter over Facebook or other social networks. Right now, we do believe that Twitter is a very important tool that will continue to rise in its importance. There is no point in comparing Twitter with its rival Facebook or even with LinkedIn, as all the 3 sites serve very different purposes. Twitter’s public offering story has been very tumultuous to say the least. People have been buying its shares and selling within a matter of weeks. These short term fluctuations point at a basic insecurity or fear that Twitter will not make the kind of money it expects to make. Why are investors scared of Twitter? The root cause of these fears is its revenue strategy, which is to offer advertisements. Twitter advertisements hold more promise than Facebook simply because people who use Twitter tend to follow celebrities and other authority figures more than people on Facebook. Twitter has an element of social power that Facebook doesn’t. It is very easy to notice that most celebrities are active on Twitter rather than on Facebook. If a certain advertisement makes to the timeline of a celebrity or something is retweeted, chances of that product or service being used is greater than a full-fledged Facebook campaign. This is not to say that one must abandon Facebook ads but what we must understand is that there is no comparison between the two. Comparing Twitter with Facebook Let us try and compare Facebook with Twitter as they are both public companies. We hesitate to do this, but we will still do it because of the enormous queries we receive constantly regarding Facebook and Twitter ads. Here are some of the main reasons why Twitter is one of the most valuable technology companies today and we should continue to prioritize our social media activities on Twitter. Twitter has a better advertising strategy than Facebook Facebook has more than 5 times the number of active users than Twitter and these users share more than 10 times the content that Twitter users share. However, the cost per thousand impressions (CPM) is higher on Twitter than on Facebook. Also, Twitter’s promoted tweets are more favorable to business users than Facebook’s ad products. We may also add that the click-through rates are higher on Twitter than on Facebook. It is also interesting to observe that more people use Twitter from the mobile phones than they use Facebook. Twitter was initially built as a 140-character tool to be used through text messages. Eventually, it reached a stage where it can compete with the big names of the Silicon Valley. Being the superior tool that it is, Twitter may actually trounce Facebook when it comes to advertisements. The celebrity connection Twitter obviously is a better platform when it comes to celebrity engagement. More celebrities on Twitter are active than on Facebook. Politicians, government offices, police, army, psychologists, doctors and every other thought leader uses Twitter. What we can understand is, Twitter tends to attract thought leaders and their followers, whereas, Facebook tends to attract people and their friends. It is easier to monitor Twitter and people’s engagement there than people’s engagement on Facebook because it is a walled garden. Twitter celebrities need not even be actual celebrities. They could be anonymous celebrities made famous just by the content they share. There are several people whose identities we do not know but continue to post amazing content that they, otherwise, wouldn’t on Facebook. This anonymity and privacy sets Twitter apart from Facebook. That is also one of the reasons why advertising on Twitter may be easier, as we will know whose followers like what. Twitter is immediate The way content can spread on Twitter is vastly different from how it can spread on Facebook. On Twitter, all that one needs to do is share content and it can get retweeted and shared by complete strangers. This is because Twitter is a public forum unlike Facebook. On Facebook, sharing depends on known connections and that can take a lot of time. A certain viral content can travel through the world faster on Twitter than on Facebook. Thus, it may be a better option when considering advertisements. There is a larger audience who will be able to spread it across Twitter in a relatively short period of time. This immediacy sets Twitter apart from its competitors. Immediacy is very important when it comes to advertising or marketing. The more quickly a message gets through, the better it is for people to sell their products or services. Twitter is democratic One of the main reasons why we prefer Twitter over Facebook is because of its democratic appeal. Journalists, reporters and just about anyone in the industry prefer Twitter to Facebook. It is a valuable broadcasting tool that can spread information in a democratic way. Facebook on the other hand has certain restrictions and it also depends on people who may choose not to share certain content simply because they do not like the friend that shared it. That