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Twitter’s Adam Bain On “Buy Now” Tweets: “What We Do Is Monetize Emotions”
Says Twitter must prove to retailers that it can generate sales.
Adam Bain, Twitter’s President of Global Revenue, promised new advertising products and explained how Twitter plans to make money with its new “Buy Now” e-commerce button at the Web Summit conference today in Dublin, Ireland.
In a conversation with Richard Eyre of the Interactive Advertising Bureau, Bain recapped some of Twitter’s latest quarterly revenue numbers:
- $361 million revenue in Q3
- 114 percent revenue growth year-over-year
- international revenue up 176 percent year-over-year
Bain told the audience that Twitter is expanding its existing advertising products, and also planning new ones in the near future.
“We feel like we’re just getting started,” he said. “There’s a number of products coming in the next year.”
How Twitter Makes Money
Twitter currently has three revenue lines:
1.) Its advertising business, which includes things like Sponsored Tweets and Promoted Accounts.
2.) Big data — i.e., the licensing of Twitter date to third parties that was aided by its purchase of Gnip in April.
3.) Its commerce business, which primarily involves the “Buy Now” button that Twitter started testing in September.
Bain spent a fair amount of time explaining Twitter’s reasons for getting into e-commerce with the “Buy Now” button. He described the company’s commerce business as a “small startup” and said Twitter is still trying to figure out the exact business model. “We’re trying to prove to retailers and marketers that we can move products and transactions, and that will drive revenue for us.”
There’s some doubt that Twitter and other social media sites are the right place for e-commerce to happen, but Bain said it can work if Twitter correctly identifies when to show the Buy Now button.
“People are tweeting about products and services, but there’s a big distance between that and actually making a purchase. American Express and Amazon have already brought e-commerce closer to tweets [through hashtags]. We saw this as a great organic experience, and we decided to shrink that experience. If you’re tweeting about a product or service, a button shows up and you can one-click to buy.”
The challenge, Bain recognizes, is when to have that button appear.
“We’re experimenting with different products and price points, and most importantly what emotions do you need to find to generate a sale. What we do is monetize emotions.”
Twitter’s e-commerce experiment, Bain said, will fit in with the company’s overall approach to advertising and revenue.
“When we started the ad business four years ago, the idea was to build a business that makes us proud,” Bain said. “We decided to bring an ad product that was more organic and native to Twitter. We could’ve done banner ads like everyone else and grown revenue much quicker. But our ads look and feel just like the organic content. It respects the user.”
Twitter’s Buy Now test is very limited at the moment, having started with a handful of brands, artists and non-profits including Home Depot, Eminem, Brad Paisley, The Nature Conservancy and a few others.
Stay tuned for more coverage from Web Summit later this week.