Commentary

47, Or The Number Of Real-Times In Twitter's File

"Real-time" is cited 47 times in Twitter's S-1 filing. You can bump it up to 69 times when the dash is removed between real and time. On top of that, "Live events" is cited 10 times and "auction" 12 times, all in reference to advertising.

Essentially, Twitter knows it's the ultimate real-time platform.

When Twitter acquired MoPub, we knew some sort of real-time bidding (RTB) tie-in to Twitter's mobile platform was on the horizon, and their S-1 filing confirms it. "Once we complete the acquisition of MoPub, we plan to invest to grow MoPub’s current business, including by extending advertising across the mobile ecosystem through the MoPub exchange," the filing reads. "We also plan to use MoPub’s technology to build real-time bidding into the Twitter ads platform so that our advertisers can more easily automate and scale their advertising purchases."

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What those ads will look like remains to be seen, but up until now Twitter has utilized native formats. It would surprise me to see a drastic change on mobile given its extremely simple user interface, but Twitter notes in the filing that they "intend to develop new and unique ad formats for" advertisers. Either way, as long as the new formats don't drive all of their users away (they won't), Twitter is the perfect place for a mobile RTB exchange.

While not explicit, one of their six value propositions to advertisers underscores the value an RTB exchange will bring to Twitter. The filing reads: "Twitter’s real-time nature allows our advertisers to capitalize on live events, existing conversations and trending topics. By using our Promoted Products, advertisers can create a relevant ad in real time that is shaped by these events, conversations and topics."

The filing also talks about utilizing auction-based ad pricing. "We use an auction for our pay-for-performance Promoted Products. The algorithms underlying the auction take into account the predicted ad engagement rate of an advertiser’s campaign. As such, advertisers with higher quality and more relevant ads generally have a higher probability of being successful in the auction and can win the auction with lower bids," it says.

And since we're talking mobile -- because Twitter certainly is, noting that "mobile has become the primary driver" of their business -- let's explore how that works for Twitter and real-time. At its core, Twitter is a mobile service; its 140 character limit is in direct relation to SMS messages.

Twitter writes, "We aim to become an indispensable daily companion to live human experiences."

Doesn't that sound an awful lot like the thing that's within five feet of you…right now? Your phone?

That line from Twitter reminded me of a study conducted by Harris Interactive for Jumio this summer. The report said that 72% of adults keep their smartphone within five feet of them most of the time. Truly speaking to a phone's indispensability was the study's finding that 9% of all adults and 20% of all 18- to 34-year-olds have sex and use their smartphones at the same time. Talk about a companion to live human experiences.

Facebook has their Facebook Exchange, but it's not available on mobile. So Twitter will be charting new territory here, and on the surface it seems to be betting on a lot of trends: mobile, RTB, and IPOs. Let's briefly look at those trends.

Mobile: The Harris Interactive/Jumio study covers the most important part: People use their phones, and that's not going to stop. It's also reasonable to assume that people will not stop using Twitter on their phones.

RTB: For online display RTB accounts for about 20% of ad spend, with projections hitting 30%+ in a few years. While that's for online display, it shows that advertisers in general are comfortable with RTB.

Mobile RTB: Nobody has ever given me a definite answer as to how much ad spend advertisers typically put toward mobile RTB, but I'm almost always given the same response: "Single digits, but that will rise."

IPOs: Going public is a recent trend for ad tech companies. While Twitter is not an ad tech company, their money will come from ad tech, so I think it counts. The public companies haven't been public for long enough to see major trends, but the company Twitter is most often compared to -- Facebook -- has rebounded nicely after figuring out its ad plan.

1 comment about "47, Or The Number Of Real-Times In Twitter's File".
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  1. Anni Paul from BoscoSystems, October 7, 2013 at 6:33 p.m.

    I knew right after the MoPub deal that Twitter was going public. I didn't agree with Facebook's timing, but Twitter's timing is excellent. And their focus on mobile RTB - which the smartest ad networks like Airpush and Millennial Media are concentrating on - tells me that they truly get where this industry is going and will be ready to capitalize on the huge potential staring them in the face. Mobile RTB's a thing of tomorrow. The opportunity is not now. http://www.airpush.com/what-is-mobile-rtb-and-why-should-i-care/

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