Kim Kardashian Can Teach Twitter Inc a Thing or Two About Advertising

By Markets Fool.com


Source: KimKardashian.com.

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What if everyone could use Twitter the way Kim Kardashian does?

I'm not talking about the stream of self-promotion that many people use Twitter for (myself and Kim included). I'm talking about the way Kardashian described how she uses Twitter to Kara Swisher at the Code/Mobile conference last fall. It's her Google : "Twitter really became my form of Google ... It's an amazing focus group."

Connecting businesses to intent
During her interview, Kardashian noted she would simply ask her Twitter followers for product suggestions or places to eat in a city she was visiting. This works great for celebrities who have millions of followers around the world -- 32.2 million for Kardashian as of today. And while the utility is something the average Twitter user simply can't obtain from his or her tens of followers, Twitter has an amazing opportunity sitting in front of it.

It simply needs to connect users asking questions like that with the businesses that can provide a real answer. Make it easy for businesses to see those tweets and respond with an offer, or more information about their products. This would increase the value of Twitter for both users and businesses, leading to stronger engagement -- an area where the company has struggled recently.

Additionally, it flips Twitter's current advertising model on its head. Twitter asks businesses for advertisements to display to potential customers. Under what I'll call the "Kim Kardashian model," Twitter would display potential customers to advertisers. With a stronger intent to purchase from potential customers, Twitter could improve the conversion rates for businesses.

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Although Twitter has taken a similar approach to Google to find interests based on what users type into its platform, it lacks the real-time relevance of Google's ads. That's particularly ironic considering Twitter's focus on real-time information. More timely advertisements are key to boosting conversions.

Twitter saw a significant decline in ad revenue growth last quarter, which it chalked up to a tepid reception of its direct-response advertisements. Those ad units are priced based on conversions instead of impressions, and the lower-than-expected ad revenue indicates the company's ads aren't converting as well as expected. If Twitter wants to continue growing its revenue at the pace analysts are expecting -- 58% this year, 49% next year -- it needs to improve its ability to convert ad impressions into sales.

Facilitating commerce
Twitter introduced a buy button last year, but its use has been relatively limited. Most recently, it's been used to sell tickets to big events, but Twitter has the potential to drive much more commerce with the amount of shopping intent data available from its users.

Google, likewise, is taking advantage of the amount of shopping intent on its platform, displaying product ads in a carousel at the top of search results, and recently introducing a buy button of its own. Google has effectively figured out how to draw intent out of whatever users type into its search bar, and it uses that data across several services. Most recently, it introduced a Click-to-Shop button to YouTube TrueView ads.

With the amount of shopping intent on Twitter every day, the opportunity for Twitter's buy button is great. However, it needs to implement it in a smarter way than it currently does. Instead of a feature integrated into advertisements, Twitter should take a cut of commerce on its platform, and facilitate more commerce by connecting users with purchase intent to businesses with the ability to service that user.

Attacking from a different angle
Twitter has a lot of valuable data on its users based on who they follow and what they click on. But the most valuable data it has is what its users are saying, and even more than that, what they're asking. Twitter's users are searching for answers, and very few of them are receiving them.

The ability to place tweets with questions in front of users who have the answers would boost engagement on its platform, as well as the potential revenue Twitter could generate from businesses either through ads, or a commission on commerce.

It just has to extend the Kim Kardashian Twitter experience to everyone.

The article Kim Kardashian Can Teach Twitter Inc a Thing or Two About Advertising originally appeared on Fool.com.

Adam Levy owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Twitter. The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.