The future of the Twitter ecosystem is uncertain, to say the least. A wave of enhancements this year has allowed Twitter to take traffic share back from the third-party application developers that helped accelerate Twitter’s growth. And, this appears to be a significant part of Twitter’s strategy going forward.
As Twitter looks to shore up its position, particularly as suitors reportedly bring multibillion dollar offers for the company, the ecosystem could suffer. Many of these companies are looking for ways to survive, yet they don’t seem to be looking in the right places: a great opportunity could be slipping through their fingers. For this sector of the social media market to regain its footing, it should look back to an approach that’s been around in the marketing world for decades.
The Demise of the Ecosystem
Until this year, twitter had plenty of feature gaps. I remember when it wasn’t unusual to go to Twitter.com or text 40404 to share my thoughts with my followers. Over time, new companies were formed to take advantage of what Twitter wasn’t doing on its own. Smartphone apps, analytics, scheduled tweets, pictures and video, among others, were integrated into the service through third-party development efforts to make Twitter easier and more useful to its rapidly growing user base. This trend gave us a new wave of social media household names, such as HootSuite, TweetDeck, UberTwitter and Topsy.
The market for enhancing Twitter was robust and growing … which his probably what caught the company’s attention.
Though Twitter has dabbled in closing its feature gaps in the past – e.g., with the 2008 acquisition of Summize – it approached the task in 2010 with unparalleled vigor. Kicking off the Chirp developer conference in April with the acquisition of iPhone app developer Tweetie, Twitter introduced new features, applications and revenue models at a rapid pace, much of it coming at the expense of the ecosystem that fueled its popularity. Then, with the “new Twitter” rolled out, it almost looked as though the company was truly going head-to-head with its own application ecosystem.
And, it makes perfect sense.
Twitter is ostensibly eager to demonstrate the legitimacy of its sky-high valuation, estimated to be around $4 billion recently, especially if a liquidity event is in the cards. In the near-term, it’s prudent for the company to consolidate user interaction and traffic to increase revenues, widen margins and cultivate end-user loyalty. Consequently, what’s good for Twitter isn’t necessarily good for the companies that have tied their future to the platform – leaving the ecosystem exposed to considerable risk.
The Standard Coping Mechanism
The prevailing wisdom for ecosystem companies has been to pursue broader reach. It’s a straightforward diversification play, in which Twitter ecosystem companies expand their services to other platforms. HootSuite, for example, lets users publish to LinkedIn, Facebook and WordPress, as well as Twitter.
This tactic does reduce platform-related and strategy risks, but it fails to provide an opportunity for differentiation. Social media content and analytics management is already well on its way to commoditization, leaving little room for the rapid growth that Twitter ecosystem companies (and their investors) likely crave. The only ways to compete are on usability, insight and cross-platform reach. The barriers to entry are low – as Twitter has demonstrated in triggering this problem for its ecosystem – making differentiation virtually impossible.
For the ecosystem as a whole to recapture its momentum, a fundamentally different approach is necessary. Finding a way to cut through the endless tweets to help users with specific interests monitor and participate in a targeted manner could provide a wide range of opportunities to a sector that’s watching its future shrink.
Follow the Marketers
In the B2B space especially, industry matters. Marketing teams monitor, forecast and respond to industry trends almost with religious fervor. As a marketing strategist with a couple of large professional services companies, I saw this from a spot deep in the trenches, and in my social media marketing role now, it’s easy to see the convergence of industry and social marketing.
The tools of the industry marketing trade include reports, briefings, news, data and other intelligence to help a company understand the factors affecting it – and how to use them to increase revenue, profits and market share. I used to monitor these materials regularly in order to identify and plan for the threats and opportunities present in the marketplace. And, it worked.
In the social media space, the commensurate industry marketing effort remains cumbersome. It’s still difficult to narrow the field of tweets and users down to what is directly relevant. A targeted view of trends and information remains elusive. And, the same problems exist for message propagation: extensive community management efforts are necessary to reach the appropriate audience for a particular company.
The killer app for the Twitter ecosystem – the move that could redefine its future – could be to focus on industry marketing. Though the audiences are a bit narrower, a well-planned app could fetch a premium (translation: higher revenue and margin potential), and the model could be replicated across many industries.
Making It Work
To appeal to industry marketing (and, more generally, industry-watching) users, a focused Twitter app would effectively have to create a community within a community. Think broadly of the total Twitter user base and also of the varied users and keywords you follow. There are obviously users and trends outside your corner of Twitter that you’d like to learn about if you’re following an industry closely … and there are parts of your own follower base that you’d want to exclude from this exercise. A targeted industry-focused Twitter app would integrate what’s relevant from both worlds into a unified view of platform activity to keep you engaged with a specific subset of users and content.
So, how would it work? Let’s walk through it.
An industry marketing Twitter app would dynamically assemble a community using hashtags, keyword searches and user relationships – not to mention including users who adopt the app and others who opt in without using the app. Lists could be used on the back end to facilitate this aggregation and make ongoing management easier. The inbound flow of information would thus be controlled through the developed and cultivated community, simplifying social media monitoring, trend identification and analysis.
And where would this targeted content come from? You!
The same features that would provide a contained view of relevant Twitter activity would also offer an environment for content-based marketing to a controlled audience. Rather than tweet your company message and hope it gets in front of the right users, you’d have a targeted market through the application – almost a tunnel through Twitter directly to the people you want to reach. Every marketing investment in this environment would thus become more valuable.
It’s difficult for B2B marketers to see the value of Twitter, let alone buy in enough to invest real time in developing and executing a strategy (and I’m speaking from painful experience, having done it several times). It can be done, but you’ll walk away with a few scars. Industry-specific tools would take much of the sting out of the process – and this is what presents a tangible, high-potential opportunity to the Twitter ecosystem companies.
Preserving and Growing the Ecosystem
The Twitter ecosystem’s prospects may be in decline, but it doesn’t have to be. The intersection of social media and traditional industry marketing provides a profound opportunity for rehabilitating opportunities in this sector. Many marketers have highly specialized needs, and they would clearly benefit from having a focused way to cut through the noise of 175 million users.
A viable ecosystem can exist, but it has to change. Rather than target the gaps in the Twitter platform – gaps that Twitter should address anyway – the more effective play is to shift attention to different end-user communities and identify application development opportunities where specific business knowledge is the key to growth.
Differentiation is necessary, and it’s getting increasingly difficult to beat Twitter at this game. Turn to industry needs, however, and there’s a market waiting to be tapped.