If you weren’t convinced about Twitter’s advertising platform, new statistics from the company’s CEO Dick Costolo might have you looking back into putting some money aside to advertise on the service.
Spreaking to Walt Mossberg at AllThingsD’s D9 event, Costolo said that Twitter was a “remarkably successful business” that currently has over 80% of its advertisers choosing to renew their campaigns on the service. Referring again to Twitter ads as “orders of magnitude higher” than traditional web adverts, advertisers including Volvo have seen 50% engagement rates via one advert on the Twitter website.
Radio Shack are reported to have upped their instore exchanges and purchases by double digits from the day before they ran an advert on Twitter, keeping the campaign exclusive to Twitter users.
Internally, Twitter said it would have 100 advertisers by the end of the year, in reality it had 150. This year, the company is working with over 600 companies. Costolo says the problem isn’t finding advertising partners, it’s making sure that it “doesn’t jam” the service with too many ads.
When asked whether Twitter was profitable, Costolo successfully managed to dodge the subject.
Impressive figures, but of course the company is going to concentrate on the more successful campaigns. With Twitter about to introduce its own photo sharing service with Photobucket, we could see more targeted advertising campaigns in the very near future.
We know that Twitter has been growing astronomically. At the same time, Twitter is still an emerging service, spreading its wings in the process of transferring from the early adopters to the Internet en masse. Pew Research reports that since Twitter use has grown 5% since November 2010 to May 2011 from 8% of U.S. adult Internet users to 13%.
Pew says that 95% of all Twitter users own a mobile phone and 54% of those users access Twitter via mobile. Black (25%) and Hispanic (19%) people tend to use Twitter more than white people (9%). Twitter use has seen a rise in all age demographics. The biggest jump has come in the 25 to 34 years old age bracket, up 10% with 19% of people in that group now using Twitter.
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In the November survey, the most likely age bracket to use Twitter was the 18 to 24 bracket, with 16% of total users. That massive bump in users between 25 and 34 unseated the youngsters (18%) as the most likely to use the service. That could portend well for Twitter’s attempts to build an ad service on top of the platform as the 25 to 34 age group is one of the most influential when it comes to marketers and purchasing trends. Use by 35 to 44 year olds grew from 8% to 14%.
More men (14%) use Twitter than women (11%). Users tend to be college educated (16%) and urban (15%) or suburban (14%). Use was spread across income brackets with 12% to 15% in each group from less than $30,000 to $75,000 plus.
The report asks an interesting question. The base line question was more or less: “Twitter, have you ever done this?” That is where 13% reported the affirmative. Yet, the answer to the question “did you use Twitter yesterday?” produces much lower results, with 4% of users saying that the did. That is double the amount of Internet users (2%) who said they “used Twitter yesterday” in November 2010.
That stat speaks to Twitter’s well-known problem with user retention. Whether there are 200 million or 300 million accounts is not relevant, but how many people actually use the service.
The study was a national U.S. survey of 2,277 adults age 18 and up done via telephone between April 22 and May 26, 2011. The margin of error is +/- 3.7%.
Tapjoy chief executive Mihir Shah said in an interview that a single line of code could solve his company’s dispute with Apple over the use of certain kinds of promotions for mobile games.
That single line could stop incentivized app downloads from being counted toward Apple’s top rankings list, Shah said. So far, Apple hasn’t responded to Tapjoy.
Apple has communicated that it is concerned that incenting users to download apps, as Tapjoy has done as one of its major businesses, has led to a manipulation of the top rankings for mobile games on Apple’s App Store. So Apple banned the incentive ads a few weeks back.
Tapjoy and Apple have held talks on the ban during the past few weeks, but Apple’s hard-and-fast ban on “pay per install” incentive promotions remains in place. Apple reportedly felt that developers using Tapjoy and other incentives were unfairly gaming the system and hurting the quality of the game rankings.
But Tapjoy said such incentivized promotions are common and that their use has enabled game developers to create a predictable and stable business on a platform that has a lot of competition.
Shah met with Apple to try to convince the company to allow a limited amount of pay-per-install promotions, with a cap that prevented developers from buying their way into the top 25. But Apple disallowed that kind of compromise, according to Tapjoy. Then Shah proposed the single line of code change. Apple did not respond to that suggestion.
“We have a simple fix for this problem,” Shah said. “If this is all about the top charts, we can solve it with that line of code. I am hoping this is all a misunderstanding.”
As we reported yesterday, Tapjoy surveyed 496 iOS (iPhone, iPad etc.) developers that have used its mobile app distribution service. Almost half of those have reported an increase in user complaints about the inability to earn in-game currency by installing other apps. A quarter of the respondents said they are receiving “way too many” user complaints about the problem.
“It’s clear that the effects on developers and users have been pretty telling,” Shah said. “Early on, Apple was a huge proponent of innovative developers and it encouraged those developers to make big investments in its platform. Unless there is something we are missing, they now seem completely uninterested.”
The number of developers who saw their game usage decrease after the Apple policy change is eight times higher than the number who saw game usage increase. And the ratio was 15 to 1 for those who saw revenues decline versus those who saw a revenue increase. At least two-thirds of the companies surveyed said that 20 percent or more of their revenues came from the pay-per-install model. Many said that pay-per-install generated 60 percent or more of their revenue.
Last month, developers found out that Apple was rejecting their new pay-per-install apps and updated apps because of its concerns that the apps violated one of the App Store rules. In a pay-per-install app, a user is encouraged through an incentive to install another app. The developer of the app that gets installed shares revenue with the original app that steered the user to make the install, so it is a kind of advertising program. And it has been a lucrative one at that. The system allows developers to distribute their apps much more widely than they otherwise could.
But when Apple tweaked the way it calculates App Store rankings a couple of months ago, it also changed its stance on pay-per-install apps, for a largely unexplained reason. Developers have been directed to section 3.10 of the Apple developer program license agreement, which says, “Developers who attempt to manipulate or cheat the user reviews or chart ranking in the App Store with fake or paid reviews, or any other inappropriate methods, will be removed from the iOS Developer Program.” It may be that Apple views the campaigns as unfairly gaming the system, but the company has not been crystal clear in communications. Apple evidently doesn’t want its top App Store rankings to be manipulated. Some days into the changes, everyone seems to believe that Apple has users in mind as it enforces the 3.1 clause more stringently than it has in the past.
The good thing about incentivized apps is that they allows children and other people without credit cards to get new paid apps without having to charge the transaction to a credit card, Shah said.
“A significant number of users are upset about [the change],” Shah said.
Shah also said that the situation is similar to third parties trying to game Google’s search research. Rather than completely shut down the search engine optimization companies, Google makes its algorithms better so that the search results can’t be gamed as easily.
Tapjoy, Flurry, AdMob, W3i and Apple’s own iAds have generated considerable revenue (possibly hundreds of millions of dollars) through pay-per-install campaigns.
Over time, Apple may suffer from this change in policy as Tapjoy and other game developers embrace the Android platform, which doesn’t have the same restrictions that Apple has put in place.
“There is an enormous amount of shift in investment to Android,” Shah said. “What Google has done great is made their business predictable. Our Android business is doubling month over month.”
I believe that software patents should not exist. They are a tax on innovation. And software is closer to media than it is to hardware. Patenting software is like patenting music.
The mess around the Lodsys patents should be a wake up call to everyone involved in the patent business (government bureaucrats, legislators, lawyers, investors, entrepreneurs, etc) that the system is totally broken and we can’t continue to go on like this.
First of all, the idea of a transaction in an application isn’t novel. That idea has been resident in software for many years. The fact that the PTO issued a patent on the idea of “in app transactions” is ridiculous and an embarrassment.
Second, Lodsys didn’t even “invent” the idea. They purchased the patent and are now using it like a cluster bomb on the entire mobile app developer community. They are the iconic patent troll, taxing innovation and innovators for their own selfish gain. They are evil and deserve all the ill will they are getting.
Third Apple and Google, the developers of the iOS and Android app ecosystems (and in app transaction systems) did license the Lodsys patents but that is not good enough for Lodsys. They are now going after mobile developers who use the iOS and Android systems. The whole point of these app ecosystems is that a “developer in a garage” can get into business with these platforms. But these “developers in a garage” can’t afford lawyers to represent themselves in a fight with a patent troll.
The whole thing is nuts. I can’t understand why our government allows this sh*t to go on. It’s wrong and it’s bad for society to have this cancer growing inside our economy. Every time I get a meeting with a legislator or goverment employee working in and around the innovation sector, I bring up the patent system and in particular software patents. We need to change the laws. We need to eliminate software patents. This ridiculous Lodsys situation is the perfect example of why. We need to say “enough is enough.”
We know that 
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