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Fervent chirping

Twitter wants to grow in India by going local. Will its strategy click?

Over the years, microblogging site Twitter has tried hard to find new ways for audience engagement, with its latest effort being a service known as Twitter Seva — a tailor-made public grievance mechanism, designed for India. All the news and views generated on the site have no doubt made the different arms of the government sit up and take notice, with the railways ministry being the first to establish a Twitter war room and others soon following suit; the latest was the Ministry of Commerce, which got its own handle on April 21. In fact, railways minister Suresh Prabhu — who famously managed to get a diaper delivered on a running train after a hapless father tweeted to him for help — is said to be reportedly hooked to the ministry’s Twitter feed all day. 

Taking flight 

While the political elite have been flying to the little blue birdie to announce, break or comment on news for some time now, the bird’s own flight has been somewhat thwarted. Back home in the US, post its 2013 listing, the microblogging site has fallen out of favour with Wall Street. Its user numbers — the benchmark for the popularity of a social or information network — haven’t really grown in Q4CY15, dipping to 305 million active monthly users from 307 million in Q3CY15; the figure grew just 2% q-o-q by Q1CY16. Wall Street mavens and financial analysts, who perhaps benchmark any similar social network against the wonder that is Facebook, have been taking Twitter’s management to task for some quarters now, but that hasn’t been of much help. Investors are expecting Twitter to grow at any cost and the Twitter Seva platform perhaps stems from this need. 

It would be easier to understand just why Twitter chose India as its test lab in the light of its management’s comments on the nature of the platform. Explains Parminder Singh, Twitter’s MD for southeast Asia, India and MENA, “Twitter is a global service — 79% of our user base is outside the US. Our international sales grew by nearly 69% in 2015.” If not its home country, Twitter has to look for additional users in other geographies, and India’s high digital potential is a future promise that many internet companies are counting on. “With a $1.1-billion digital ad spend planned for 2016 alone, a 25% growth rate and 400 million internet users, India is Twitter’s fastest growing revenue market in the APAC region,” Singh goes on to add. While the company declined to share local absolute user and revenue numbers, it made it amply clear just how important this geography is to Twitter. 

Four years ago, however, this was not the case. Jack Dorsey and gang had almost dismissed India as a pasture for future growth. Over time, there was a correction in line with the changing digital environment in the country. In 2012, Rishi Jaitly was assigned the job of putting together a nest for the brand in India. Jaitly, an American of Indian origin, has spent nearly half of his career working with NGOs and the other half with tech companies, including Google.

“If you and I were chatting a few years ago, I would have talked about our strategy to connect with the top tier in India, immerse ourselves completely in mass media pop culture and drive relevance in national politics,” says Jaitly, today the APAC and MENA VP at Twitter. Over time, Twitter built solid partnerships with the who’s who of the country: it worked with news channels, government agencies, the prime minister’s office, political parties, ICC and BCCI, sports rights holders like Star India and the Hindi film industry. Basically, Twitter was there to help whoever needed to charm the audience. “That delivered results for these storytellers — whether it was a film producer like Red Chillies Entertainment or a GEC like Colors TV, or even the BCCI. It helped them bring to life their audience, while also helping Twitter: India became our fastest growing market,” recalls Jaitly. 

The other step the company took to break into the Indian market was to make Twitter easily accessible to the audience by partnering with telecom carriers, handset makers and even DTH service providers. But all this wasn’t enough, as any foreign product has to imbibe a bit of the local flavour to create a fan following. “Our strategy was to ensure that Twitter as a product felt Indian — optimised for Indian users from a product and software standpoint. So, in India, location-based Twitter trends are available in more than two-dozen cities now: you can see what is trending in Amritsar and Jaipur, for instance,” says Jaitly. The company innovated on all fronts, right from ensuring that all Indian languages render perfectly on the site to building a partnership with — and eventually acquiring — ZipDial, a company that could deliver tweets to your SMS inbox.   


While the impact of the platform on daily life is undisputable — after all, tweets have been known to cause political upheavals, if not revolutions — monetisation is still somewhat of a puzzle. Venture capitalist and Seedfund co-founder Mahesh Murthy drives home the problem, “The company hasn’t figured out its revenue model. Twitter has nearly 310 million users but that number is not growing, while Facebook has grown to 1.5 billion (by December 2015).” 

Adds Sateesh Andra, MD, Endiya Partners, “Facebook and Google have perfected ad monetisation. Twitter might be a high-utility service, much like WhatsApp, but who pays for such platforms? They are yet to evolve in terms of advertising.” The numbers bear out Andra’s contention: of the Rs.5,000 crore digital ad spend in India, Facebook and Google between themselves — including search, display and YouTube — account for nearly Rs.4,000 crore. Facebook alone accounts for around Rs.650 crore — roughly 10% of that going to third-party marketing done through Twitter — with Twitter actually getting none of this spend, according to industry inputs. And although telecom and auto companies, among others, rely heavily on digital advertising for marketing, even they carve out only 5% of their digital media budget for Twitter. In many cases, the platform serves as no more than an accompaniment, bearing out the contention that perhaps the company doesn’t have a concrete business model yet.

Currently, Twitter generates its revenue from two sources — the first being promoted tweets, trends and accounts, and the second, data licensing; in fact, the first category generated 89% of its global revenue in 2015. Twitter India Communication’s numbers, sourced by Outlook Business from the RoC, peg its FY15 revenue at Rs.13.3 crore. However, Twitter’s APAC PR Deborah N says, “The audited report shows OPERATING [emphasis Twitter’s] revenue for Twitter Communications India. This is NOT [emphasis Twitter’s] sales revenue. Twitter does not provide sales revenue breakdown by country.” According to the company, operating revenue refers to the service fee income of Twitter Communications India, derived from processes such as marketing support, business planning assistance and related auxiliary services to build, maintain and expand the internet user community and potential advertisers in India.

Given the dismal figure, the management is at pains to reiterate that Twitter is an interest and information network, not a social network. Under that definition, how does Twitter help — and hook — brands? Well, the USP for advertisers and media planners seems to be the ‘talkability’ quotient that the medium offers. “While it doesn’t have the absolute reach of a YouTube or Facebook, it definitely ‘amplifies’ a topic, if used well. It is an important part of a brand’s social and digital presence, especially when it comes to customer relationship management and online reputation management,” says Vivek Bhargava, CEO of iProspect Communicate. Micromax CMO Shubhodip Pal agrees with Bhargava. The homegrown handset giant has been aggressively pursuing the digital medium for promotions. “But we were doing one-off campaigns with no sustained strategy. Now, we have revamped our brand logo and reassessed our Twitter strategy. If used properly, you’d be surprised at how much of a force multiplier Twitter is,” says Pal. 

While he feels that the medium is great for launches and brand engagement, he adds that it doesn’t hold audience interest for very long. “From Twitter, you have to redirect [the audience] somewhere else,” he says. Media planners agree that Twitter needs further evolution in India to claim more out of brands’ budget allocations. “Currently, it is used as a one-way megaphone. Very few brands have used it for engagement,” says Viraj Malik, MD, PK Online. He cites the limited format Twitter offers as the reason why. “You can do very limited things with a hashtag. Instagram, on the other hand, has grown because of its visual nature, which brings more engagement,” Malik says. Most Indian brands are still wondering how best to utilise Twitter, which shows in its limited operating revenue here. Add to this the fact that usage is free and democratic — both up to a point, although the latter is a story for another day. 

As for free usage, while hashtags might be free for most people to create and circulate, there is more than enough evidence of online influencers using them to help brands gain traction — all for a tidy little sum. Several news stories over the past few months have tracked just how easily these hashtag trends can be faked, with brand managers showing artificially created spikes in audience engagement. Several fly-by-night media agencies exist as middlemen, with influencers on their rolls to help make brands and brand activities trend within hours. None of this, of course, shows up on Twitter’s bottom line. The agencies on their part vociferously claim that this doesn’t happen very often, but not that it doesn’t happen at all. “Some companies feel that it’s better to spend on influencers and gratify them [instead of creating and sustaining organic hashtag trends]. Such influencers — bloggers, DSLR photographers, food critics, etc. — charge anywhere between Rs.200 and Rs.20 lakh. Twitter is a democratised medium and influencers operate independently, which — ironically — ends up devaluing the platform,” says Bhargava

.But there’s an even bigger problem waiting in the wings for Twitter — that of legitimacy. Says Naresh Gupta, managing partner of creative design agency Bang in the Middle, “At least 30% of the clicks on Twitter are reportedly fake, although it is hard to zero in on an exact figure in the absence of concrete analytics. The same goes for profiles as well. This means that while brands can reach out to 2 million-5 million users organically on Facebook, on Twitter, they are happy even if the number is 10,000.” Political parties and Twitter marketing agencies have gamed this loophole thoroughly, Gupta explains, with unscrupulous elements running multiple fake profiles through third-party platforms. The Twitter India management declined to comment on specific queries about fake tweets and fake user profiles, as well as ad rates for promoted content. 

While Pal on his part says his company hasn’t run promoted tweets yet, he admits to having set up influencer tweets. Although Micromax’s Twitter budget has gone up exponentially in the recent past from a very low base, it is still nothing compared with what the company spends on Facebook and Google ads. “Now, we are working on a different strategy — the first is to create content specifically for Twitter, while the second is to fine-tune our marketing structure to better use the medium, including newly introduced features like the carousel and customised emojis.” The unfamiliarity of these new features poses an obstacle as well. Explains Murthy, “In the early days, only five or 10 companies knew how to use ads on Google. Revenues were low because brands had to learn how to create ads. Similarly, today, most brands don’t know how to create an ad within 140 characters — they only know how to use photos or videos. So, it will take time.”  

Two to tango

Twitter, too, has woken up to this. Not being a Facebook, Google or YouTube, the medium has had to work its way around structural issues, especially when it comes to monetisation. The easiest and most popular way is through promoted tweets, although Twitter has had to work hard with prospective partners to make the medium work for them. Arvinder Gujral, Twitter’s senior director of business development, APAC, is responsible for quite a few such business partnerships. But far more interesting is his latest strategy for brand engagement — use case partnerships that help the medium make up for the relative lack of banner advertising on the site. The three most recent such examples are Twitter’s deals with Jet Airways, Kotak Mahindra Bank and ICICI Bank. “Jet asked us how it could leverage the platform, which is live, public and conversational. We worked with the company and came up with a few ideas — users can now tweet to check fares.” The other big success story for Gujral was Kotak. And what made the bank reach out to Twitter?

 “In the real world, to improve the chances of having our audience visit us, we need to be present where they gather: airports, malls, multiplexes. The same is true in the digital world as well. We launched hashtag banking so that customers could easily execute simple transactions on Twitter itself,” says Karthi Marshan, CMO, Kotak Mahindra Group. Once they register their Twitter handles with the bank, customers can also transfer money, order cheque books and check their account balance by sending it hashtagged messages. Twitter’s capacity as a grievance redressal platform has also found favour with brands. Nimesh Shah, co-founder of Windchimes Communications, which handles social networking for ITC, feels that the medium works well for customer-facing companies. “We comb through complaints on ITC Hotels’ Twitter handles and immediately notify the GM of the respective property for corrective action,” explains Shah. Marshan of Kotak, too, swears by the real-time feedback offered by Twitter. “There was an instance where a customer tweeted that the queue at a particular branch was too long. We addressed the issue in real time, alerted the branch manager, made amends and received a congratulatory tweet from the customer just 26 minutes after the first tweet,” he says. 

But these brand engagement strategies are still not enough to grow Twitter’s user base. Besides, the ITC-type complaint redressal model of usage adds nothing to its bottom line. To that end, Twitter’s India management is changing tack to bring in more users. Convinced that it has successfully reached out to the top tier of mass media users, the firm now wants to go hyperlocal. “We have seen a lot of young people logging on to the platform and are examining their media and smartphone habits,” says Jaitly. Essentially, the management wants to see Twitter move from the national psyche to the local psyche of India. This entails partnerships with colleges and universities, restaurants and chefs, regional and local music, sports, film and cultural icons and partnerships with local police. And Twitter is doing all that. “Our strategy is to become a must-have app for local live cultural interaction needs, specifically for young people,” Jaitly adds. A recent example is the site’s campaign around Makar Sankranti in Gujarat, where it worked with radio and news channels, print media and celebrities to make ‘Uttarayan’ trend. 

The other important plank of Twitter’s growth strategy in India is videos. Singh, who is responsible for the medium’s monetisation in India, set up a team dedicated to growing the company’s sales and revenue stream just last year. The initial response has been encouraging, he says. “Video is a very important part of our growth here. There has been a 400% y-o-y growth in India’s video use.” Of all the social networks, Twitter’s claim to being real time and live is the most credible — news breaks on Twitter first, most often. Singh believes that the real time plus video proposition makes it a very powerful medium. “People love video on Twitter. Of the 24 brands — including Audi, Mercedes-Benz, Mahindra and Nissan — participating in a recent auto expo, 18 used Twitter-related video campaigns.” With the acquisition of live webcast service Periscope last year and that of video property SnappyTV the year before, Twitter has added ammo to its arsenal, thereby pushing its existing broadcast and content partners to increase the video content on the website. This has encouraged even PM Modi and education NGO Teach for India to post via Periscope.  

Is this strategy working, then? “It might be too soon to tell. But the current usage doesn’t look encouraging. It’s a fantastic concept, but Twitter’s problem has never been its products — it’s been more about adoption. With the parent brand itself showing no growth in the past year, such niche offerings would not answer that problem,” says Bhargava of iProspect. Shah of Windchimes feels that unlike other networks, Twitter has in the past been slow in rolling out important features and that explains user loss. With Facebook also launching a live video feature, Periscope has enough trouble on its hands. There is the little issue of monetisation as well. But most analysts believe the live component of its video service will help Twitter keep its head above the water. “Live always commands a premium. For instance, the spot rates on a live match on a sports channel will always be substantially higher than for prime time on a GEC, although the GEC can deliver more reach. Then again, there’s a difference between live video of a match feed and, say, that of someone’s cat purring,” explains Bhargava. 

High-altitude climb

While Twitter’s India management has so far been hard at work to augment its user base and monetisation opportunities, it has also had to stave off the duopoly of the digital advertising space — Facebook and Google. Although Twitter doesn’t release user numbers, a 2015 report pegs its social media share in India at 17% with 23 million users, compared with Facebook’s 167 million. Even simply from the advertising point of view, the going is tough for Twitter. “Google and Facebook have massive user reach and hence, loads of inventory. That also means Facebook can offer a lower cost per thousand impressions per post and get exponential average user revenue compared with Twitter,” says Bhargava. How much do rates vary for promoted posts across media? “If, for instance, I pay two to three paise per like on Facebook, then Twitter costs Rs.10-12. The latter isn’t cost effective due to its limited reach. Instead, Twitter shines during time-bound campaigns, for example, when a brand wants to celebrate a particular date by promoting a hashtag,” he adds. 

Given that the ad inventory on Twitter is limited by design, number of users and time spent on the site, ad impressions on Twitter cost 1.7-2x that on Facebook (which is Rs.40-50 for every 1,000 impressions). While media buyers say promoting a trend costs Rs.6.5 lakh-20 lakh on Twitter, promoting a hashtag costs Rs.6.5 lakh. The going rate for showcasing profiles as ‘accounts you might want to follow’ costs Rs.15-30 a pop. In comparison, Google AdWords costs anywhere between Rs.2-12 per click, although certain generic keywords can be prohibitively expensive. Defending Twitter’s pricing, Singh says, “Auction pricing is always guided by demand from consumers. Besides, we charge based on engagement and not impressions.” Twitter defines engagement as the total number of times a user interacts with a tweet — clicks, including retweets, replies, follows, likes, links, cards, hashtags, embedded media, username, profile photo or tweet expansion also count as engagement in their books. 

So far, Twitter’s high relevance has not converted into big bucks. It may have a great user profile but most celebrities and politicians are milking the medium with nothing flowing to its bottom line. “Twitter might not work for 80% of conventional advertisers — a lot of them FMCG brands — but it certainly works for political parties and several news and entertainment channels,” says Malik. But growing its user base continues to be a challenge for the platform and despite its current turbulence, co-founder Dorsey is far from flying low. One of his strategies to fix this problem is Fabric, an ecosystem for developers. Under Fabric, Twitter offers software development kits to developers across the globe and engages with them regularly. The strategy is active in India, too, where there are more than 3 lakh active developers. 

But how does this help Twitter? Well, the company needs to urgently develop and localise its products in a big way to win users and monetise. And for this, it can’t depend on its own developers only. “Innovations like the hashtag came from outside, not inside,” explains Gujral. Besides, the company is doing its best to milk data licensing as a source of revenue. Early in the company’s life, data licensing used to be a much bigger source of revenue vis-à-vis promoted tweets (currently, it accounts for 11%), but has that changed in response to the market. “Companies such as Unilever and Airtel have marketing budgets that run into crores, of which Twitter and other such sites get a fraction. Market research budgets are small compared with marketing costs,” says Gujral. However, Twitter has been actively pursuing companies to use its data for decision-making alongside the usual market research. Gujral shares an instance, “A telecom operator in India is laying a 4G network. It was in a fix over where to put up cell phone towers. We supplied it the relevant details by tracking where in Gurgaon people were tweeting from.” Bhargava believes data is wealth but that data licensing can only be a survival mechanism and not really a lasting growth strategy. 

What else needs fixing at Twitter? Well, early backer and cheerleader Chris Sacca shared an entire laundry list in June 2015, highlighting the need to push user growth and stem the bleed of users out of the site. Murthy concurs, pointing out, “A lot of people visit Twitter but don’t write anything. The network has to give people a reason to express an opinion.” Shah on the other hand has a practitioner’s complaint about the medium. “It must roll out products useful for businesses more quickly and provide more filters for targeted marketing, as brands today want to go hyperlocal, much like on Facebook.” Jaitly, however, is unfazed by user growth pressure. “In my part of the world, India remains a gold standard for how we think about growth and engagement.” His colleague Singh also defends the company. “Global revenue crossed $2.2 billion at the end of 2015, a 48% growth y-o-y.” 

The platform is reportedly working to fix the other little niggle that has both brands and its own management worried — more control over its own content and feeds. Explains Gupta, “Currently, Twitter is open to everyone and does not work on an algorithmic model. But over the past 3-4 months, the company has renewed its focus on tracking active users. For instance, if you have 5,000 followers, not all might be of consequence and there is a good chance only 1,000 are real followers — the kind advertisers would reach out to.” Twitter is now trying to track such genuine profiles and stem out the weeds — the bots that artificially pad up follower counts. ‘Influencers’ boasting of bloated followings will, of course, feel the pinch. “With this improved algorithm, tweets from any profile will be organically fed to only those accounts that interact with it regularly, instead of being broadcast to everyone on its followers list. This will help Twitter drive a better bargain with brands,” he adds.   

The other certainty is this — all stops are being pulled out to bring in growth. In fact, by the end of 2015, Twitter had 190,000 active advertisers, 90% more than the year before. Investor Murthy, who bought the Twitter stock post listing, too, believes the company is a bet for the long term. “I am actually bearish on Facebook’s growth — as more and more people advertise on the medium, most of the work will end up being of low quality. Unlike Google, advertising and editorial content is also not separately marked on Facebook. While it is early days for Twitter and it still has to address its core depth problem, I am bullish on Twitter.” One little birdie will definitely be happy to hear an informed shareholder say that.

with inputs from Krishna Gopalan