Friday, 7 February 2014

Not a good week for Twitter at all. Shares tank, Users stagnate, confidence disappears. But it's not all bad...

It's been a tough old week for Twitter.

In its first filings to Wall Street since their IPO, things have gone downhill. Investors are worried.

Twitter's US growth has largely stagnated and international growth is up 8 million users on the same yoy period. Small enough. 

Now with 187 m users internationally and 54m in the US, giving it 241m overall in Quarter 4 2013. In Quarter 3, that was 232m, so that's the worry because it's a small increase and USA stagnated. 

US Advertisers account for over 70% of Twitters revenue.

And it's all impacting on the share price.

Early stage poor growth like this, is really considered badly with the shares down circa -25% on the week. That's a massive offload.

It is only one quarter of data, and revenue in 2013 was 665 million usd, up from 317 million or +110% and EBITDA was up +256%. But these numbers never got a look in, so in some ways, the dissemination of information didn't help. 

Twitter still has a large advertising reach and it's still growing its users and its revenue. But the fluid typical ipo investors, may continue to depart and that's a problem.

IPO investors tend to be more 'punters' and get frightened easily. 

That's not good news for Twitter but it's likely that some maturity will come into the market in time....if that is, investors are prepared to wait. 

Monday, 3 February 2014

Superbowl Commercials were 4 million dollars for 30 seconds. Good value?

Superbowl commercials cost an average of 4 million usd for 30 seconds. But of course, the build-up on Social media and the 'excitement' that a new commercial brings, means that these Ads get a reach far beyond the showing on the night.

This year the controversy around Scarlett Johansson's commercial for Sodastream, shows how that impact can be extended. It made the front pages of a lot of newspapers and TV/Social media comment. Most advertisers release ads, about the ads, as previews to gain Social Media traction.

Doritos of course, get fans to write their Superbowl commercials, giving the campaign "legs" before airing.

Justifying the return is tough without that level of cut-through because the spots are expensive (Budweiser took 2 x 60 second spots this year = circa 16 million usd) so you have to grab the opportunity as Apple did in 1984.

Newcastle Brown Ale (you'll see it on this blog below) actually captured the Superbowl hype without having a commercial in the game. Real guerrilla tactics.

The top 5 Advertisers in the last 5 years are Budweiser, Pepsi, Hyundai, Chrysler and Coke in that order by expenditure. Interesting data from The Financial Times which shows that in order to get a return on that investment, Coke would need to sell 5.7m cans...but I think there's a point too about brand. They need to be seen as having a presence at The Superbowl in order to be quintessentially, pro-American.

Can the heritage of Budweiser for example, not be in The Superbowl?
It's a brand that's all part of Americana.

But is it worth it? 

You better believe it when it's done cleverly.

In some ways, The Superbowl is a must have for brands that need the endorsement of American culture. It's more than just spot-buying, rather, an involvement in American society.