Reference no: EM13779028

Twitter Emerges as a Digital Marketing Tool

Businesses big and small are tweeting to inform the world about their companies. By asking the question "What's happening?," Twitter allows users to tell their followers about moments in their daily lives. Twitter users post messages of up to 140 characters through SMS, instant messaging, or the Twitter website. Based out of a San Francisco warehouse, Twitter was founded by Biz Stone, Noah Glass, Jack Dorsey, and Evan Williams. It started as a podcasting company but quickly morphed into its current social networking form. People use Twitter for everything from "I'm catching some zzz's in class," to organizing protests, to fielding questions during presidential town hall meetings. On Facebook, users are able to communicate directly only if the users have agreed to be "friends." On Twitter, anyone can sign up to follow any public tweets available. For instance, actor Ashton Kutcher has more than 9 million followers.

Many marketers have been quick to jump on the Twitter bandwagon, finding it to be an effective communications tool for attracting consumers. For example, direct selling jewelry company Stella & Dot uses Twitter to post updates about the company and its products. Many of its product postings are accompanied by a link that displays product photos; thus, the posting calls attention to the product, while the photo enables interested users to see what it looks like without having to leave the site.

Additionally, Twitter has been helpful for entrepreneurs to share their expertise. Gary Vaynerchuck, who co-owns a wine retailer, shares his wine expertise with more than 900,000 followers. The bottom line is that a Twitter post can tell others what you are up to in your business. These posts can then be forwarded to others to create a buzz.

"Follow us on Twitter" signs are appearing on the doors and windows of businesses around the globe. A survey conducted by Social Media Examiner indicates that more than 90 percent of marketers use Facebook, more than 80 percent use Twitter, and about 70 percent use LinkedIn. Kogi BBQ in Los Angeles, which uses vans to cater Korean food, has incorporated Twitter as part of its core promotional strategy. The company has more than 97,000 followers on Twitter and uses the service to tell customers where its mobile Korean food vans can be found each day. The most important benefit marketers claim that social media sites like Twitter offer is increasing the exposure of their businesses.

For its first years of existence, revenue generation was not a strong priority for Twitter. Rather, its mission statement is "to constantly connect people everywhere to what is most meaningful to them." However, because no business can survive without revenue, Twitter decided to investigate unique advertising opportunities that would benefit businesses while maintaining its core values. Although businesses can still post tweets for free, they can pay to have their posts made more prominent on the Twitter site. Twitter adopted three major promotional methods to help businesses call attention to their messages among non-followers. "Promoted tweets" are tweets that businesses pay to have placed at the top of relevant search results. "Promoted trends" are placed at the top of Twitter's popular topics page for a day at a cost of approximately $120,000. "Promoted accounts" are when businesses pay to have Twitter recommend their businesses for users to follow based upon their interests.

These promotional techniques have generated revenue from marketers at Budweiser, Starbucks, and Walt Disney. General Motors used Twitter promotions to supplement its television commercials during the 2012 Super Bowl, including one that took a combative approach to competitor Ford Motor (Ford responded with its own tweets). General Motors estimates these ads doubled its amount of Twitter followers. Twitter has also made promoted tweets available over mobile devices.

Of course, with the success of Twitter comes criticism as well. Some feel that many Twitter users post mundane details of their lives just to kill time. Security issues have also been a problem. Security breaches have sometimes released users' personal information, causing Twitter to invest in security measures to guard against such problems. But these challenges have not dulled Twitter's success. With more than 100 million active Twitter users, the craze is continuing at full force.

Questions for Discussion

1. Why is Twitter appealing to companies?

2. How could Twitter be used as a tool to strengthen customer relationships and to gather consumer feedback?

3. What are some of the drawbacks of using Twitter as a marketing tool?