As if the current advertising exposure was not enough, Twitter, that has maintained a “consumer first” mantra, has announced that it will add 15 new types of ads, starting with smartphone apps. The new “Cards” model is similar to the existing model, except it will be customized for user engagement. The concerns have already begun about potential impact on consumer experience.
Advertising is an integral fact in the “connected” world. Despite its annoyance, it has its good side too. The revenue generated from showing products or services for sale drives much of the research and development of technology in use today. In addition, it keeps people employed. Twitter’s earning from advertising in Q4 2013 was almost $220 million, nearly double from the same period in 2012. Despite this success, the company has not turned a profit, and this approach is geared to address investors’ concerns.
It is quite understandable that Twitter’s new ads may upset the users, and take them away from “consumer first” approach. To a certain extent, the new ads still try to maintain this model. The customization of ads is based on products related to consumer’s initial purchase. For example, if someone purchases a plane ticket to San Diego, the related ads that could show up on the buyer’s smartphone can range from San Diego hotels, restaurants, cab service, etc. It allows businesses to target their “target customers” at the right time, which may be immediately after their initial purchase. This is smart advertising worthy of smartphones. However, is it worthy of all smartphone users?
It has been a constant struggle for media companies to accommodate their primary customers, with the generous secondary advertising clientele. Think of the ads shown in movie theaters before the movie even begins. The movie advertising business model has worked so well that mobile advertising was a forgone conclusion. However, there are major differences between the two advertising platforms.
First is that of quality. Advertising on movie screens has come a long way in the last decade. Gone are the days when blurry and tilted static slides made the early patrons pay the extra price for better seats. Now the moviegoer can feel immersed in the advertisement, and entertained. Some people even prefer to get there early to get the most bang for their buck.
Second, and from consumer’s point of view, a more relevant difference in these two platforms for advertising is one of control. In a movie theater, when the movie starts, advertising stops. This is not the case with smartphones. Advertising continues long after the purchase made through a mobile app. In fact, one does not even have to purchase anything. Browsing alone will alert the software of potential interest, and automatically assign targeted ads. In this case, every time the smartphone is in use, so is the exposure to ads. Just imagine, with so much commerce happening through mobile devices, getting ads from the related products from so many businesses can be overwhelming.
So what is the best solution? How can Twitter stay true to keeping its customers’ interests first, and earn the necessarily advertising dollars?
There are ways to address this problem. First is to offer users a choice to select the range for acceptable number of active, targeted advertising, with a minimum requirement set by Twitter. Another approach would be to make these apps more sophisticated by capturing the user’s engagement with advertising. Consumers with more elastic attitude toward receiving ads on their devices can be targeted more frequently. This may even include using the age range to vary the advertising frequency and relevance. A combination of the two approaches may allow a balance between consumer satisfaction, and running a profitable business.
Twitter’s approach in implementing new ads should continue to keep its consumers first. It affords the company a real opportunity to differentiate itself from all other platforms that cater to advertisers first, leaving the consumer’s experience in the second place.
Opinion by Amit Singh