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Michael McLellan

Will Twitter’s Data Gold Mine Ever Fully Pay Off?

by Michael McLellan | Dun & Bradstreet Editor

December 14, 2016 | No Comments »

Twitter has become a key communication platform as major events unfold live in real time around the world. Large news and media companies such as the BBC, CNN, and the New York Times regularly use the service to distribute and promote content, while Twitter also allows even the most remote or isolated individuals to get their message out. CMOs and sales leaders use it.

Twitter went public in 2013, raising about $1.82 billion in the process. But 2016 was not kind to the company. Its share price slumped. Salesforce and Disney lost interest in acquiring the social media stalwart.

Twitter generated almost 90% of its revenue from the sale of advertising (and most of that is from mobile advertising) in the third quarter of 2016, with the remaining 10+% coming from data licensing arrangements.

The data licensing business was thought to be the company’s secret sauce, as marketers and even investors clamor for data they can analyze for insight into news events and trends. The data reveal raw feelings and insights about brand perception and political leanings, among other things. Companies pay for full or partial access to the source data to gain powerful intelligence about their current or potential customers.

However, the Twitter data gold mine has come under more scrutiny lately. The company limits how much data can be accessed at once, which is one source of controversy. But Twitter has also encountered ethical dilemmas as some of its corporate customers repackaged Twitter data for sale to law enforcement and governments.

Twitter executives have publicly stated that they object to the company’s data being used to track or profile protesters and activists. But the reality is it can be difficult for the company to police the third-party use of data from the Twitter platform. So even though companies are willing to pay for data that enable better decision making, Twitter’s data business is not without its privacy and compliance challenges.

Maintaining its standing as a dominant player in the digital media world requires constant innovation, and Twitter has undergone some redesign. Yet the company’s efforts to innovate and improve the Twitter user experience have mostly fallen flat.

However, with US President-elect Donald Trump using it as his primary communication platform and dramatic events in the Middle East playing out in real time through tweeted videos, Twitter remains a truly global phenomenon that isn’t likely to go off-line any time soon.

Michael McLellan covers the business of restaurants, marketing, media, technology, and more for D&B and Hoover’s. He is a graduate of the University of Texas at Austin’s Radio-Television-Film program.

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Image by Esther Vargas, used here under a Creative Commons license.

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