Twitter IPO: Reaction from Made by Many, iProspect, Carat, We Are Social, RadiumOne, Fetch, 1000heads, Temple Bright and more

Gavin Becker, managing partner at Made by Many and former Twitter brand strategist

I don’t think it’s undervalued. Twitter’s approach to advertising is not advertising for advertising’s sake. The company stands for being able to experience the world in real time, sharing a moment. Twitter has already done a phenomenal job monetising its platform. It really is the story of the little engine that could, and has blossomed into a company that is changing the world by sharing moments and revolutionising how we consume experiences in real time. Don’t underestimate its value as only an engagement platform. Going from zero to hundreds of millions of dollars in revenues is no easy feat but under Twitter’s current leadership there’s is a deliberate, planned strategy in place with all eyes focused on a crisp, strategic execution and results. Will ads interfere with sharing the moments? Well, advertising on Twitter is happening at the moment and it’s not. The platform is incredibly democratic. The way advertising has been integrated is beautifully executed and it’s providing measurable and effective opportunities for brands.

Simon Robinson, senior director marketing and alliances EMEA, Responsys

Following any IPO, the pressure is on and the expectations of shareholders have to be met. Attracting more advertising revenue would certainly help in this area. However, Twitter mustn’t ignore its users and has to carefully assess the potential impact of any changes. In the past, Twitter has been careful to state that changes to its ad retargeting offering won’t mean users will see more ads. In today’s relationship era, Twitter needs to be smart about how this change will be implemented, to ensure that both advertisers are getting value, and that consumers continue to receive interesting, relevant content which will build engagement with brands. If Twitter wants to compete with the likes of Facebook and Google in the ad retargeting space, it will need to demonstrate an intelligent use of customer data, rather than flooding the site with irrelevant content. While simply boosting the number of ads might increase margins, if retargeting isn’t done intelligently then it’s likely to annoy users and damage relationships between brands and their customers.

Rupert Staines, managing director UK and Europe, RadiumOne

Twitter’s valuation may seem high, but we have to be conscious that the global marketing industry is worth hundreds of billions of dollars– a pot of money that we expect programmatic advertising platforms to be taking an increasingly large portion of in the future. In the first half of this year in the UK alone, for instance, the IAB has reported that Digital AdSpend was worth £3.041bn. We’re seeing a distinct shift towards digital marketing, in general, and any discussion of Twitter’s valuation has to be viewed in the context of the market as a whole. The opportunity for Twitter to capitalise on the mass of consumer data it has is massive. The company will have to tread a fine line between pleasing its advertising partners and its user-base, but as it refines its targeting mechanisms you should expect to see more relevant adverts appearing in users’ streams. One worry for the company and potential investors has to be the risk of overcooking the dish, as seen with Facebook initially. Twitter has a huge potential in the online advertising market and is a company to reckon with, but let’s not forget that the online advertising market is bigger than just one company and over-inflated expectations could skew the perceived value of its shares.

Brenda Kelly, technical analyst, IG

This is the largest Silicon Valley IPO since Facebook and underwriters of the floatation will be keen to make this more of a success in comparison. The good news is that extensive hype in advance of the Facebook IPO – blamed to an extent for its less-than-impressive debut on the stock market – has been avoided. It must be remembered that Facebook was, and is, a much bigger company — it had 900 million users when it went public, and has more than a billion today — and its size was one of its big selling points. Also unlike Facebook, Twitter has yet to turn a profit. The company reported a net loss of $79.4m on revenue of only $316.9m in 2012. Given its active user base the company does have great profit-making potential, but monetising this potential is a different story – something that early investors in Facebook learned the hard way.

Chris Whitelaw, CEO, iProspect

Twitter has been a massive success story, but it is still early in its journey to achieve commercial success and must crack the challenge of monetising its user-base. User numbers and revenue must continue to grow as ultimately its the lifetime value of the Twitter user that will really matter. In order to drive revenues, Twitter must focus on mobile advertising. It is interesting to note that 49 per cent of ad revenues at Facebook now come from mobile. The majority of Twitter traffic is also generated through mobile devices and this should be their area of focus, as a trusted way for advertisers to build their brands in what can sometimes be a fragmented and opaque market place. Linking television advertising with Twitter activity should unlock above-the-line budgets, and grow revenues significantly.

Anne McCreary, digital strategy director, Carat

Twitter will come under serious scrutiny from market analysts over revenue growth and user numbers growth in Europe and then on to the BRIC countries (Brazil, Russia, India and China). This will focus the company’s efforts on developing effective models for advertisers to market in it's channel and develop the synergies of it's product and TV. It’s about connecting people watching TV. Brand messaging will need to be wrapped in great content (if they want to stay relevant and in tune with changing consumer behaviour and expectations). At the same time as viewers are spontaneously socialising around TV, the powers that be are also adding some extraordinary technology, using broadcast infrastructure.

Tim Summers, co-founder and partner, Temple Bright Law Firm

The Twitter IPO in New York is an important test of investor confidence in the tech sector. There hasn't been anything like this since Facebook's flotation last May, and that of course didn't go to plan despite Facebook having a clearer commercial model it was bringing to market. Understandably there's lots of speculation and hype in the media this week about Twitter as an investment risk, but for me what's interesting is the opportunities it could unlock for the next wave of tech businesses looking for investment. If all goes to plan, there should be plenty of other technology firms lining up behind Twitter with confidence, pushing up valuations all round. But if it doesn't play out quite so well then fears about a tech bubble could take hold. That could jeopardise other tech firms looking at a public float to take their business to the next level, and really hold things back. All in all there's a lot at stake – and the profitability of the business model is so unproven right now that it will require a big show of faith from investors for the Twitter IPO to really fly. So there are good grounds to feel nervous – but I remain optimistic it will go well.

Chris Bland, client director, Havas Media

Regardless of the raging controversy over the company's astronomic valuation versus its less than impressive current revenue, Twitter sits in a media sweet spot between content and relationship marketing with an aptitude for mobile thrown in for added spice. The same arguments raged over Facebook's IPO last year after which they launched their successful ad exchange product and the (similarly astronomical) share price has more than held its ground. Twitter's share price will be volatile initially as the day traders leave their mark but with their own ad exchange in the pipeline and ubiquitous Twitter buttons adding to the company's ownership of priceless user data in vast quantities, investors who are in it for the long haul should be rewarded handsomely. As chairman Jack Dorsey retweeted this morning, the Twitter IPO is the start (not the culmination) of a big adventure for the company.

Julian Smith, head of strategy and innovation, Fetch

The obvious question post-IPO will be how does Twitter start to generate greater revenues whilst maintaining an active, growing user base. An obvious question that’s not so easy to answer. It, like Facebook before them, are going to have to tread that fine line between increasingly monetizing their platform through advertising whilst at the same time not turning away users. Its current ‘Promoted tweets’ have limited growth potential. Seeing more of these in the conversation stream will very soon start feeling like spam. And given the limited real estate around the conversation – I don’t see display ad formats arriving soon. I think products like Twitter Amplify have more potential. But the greatest money-making potential will probably come from the data generated by users’ tweets. If Twitter can successfully harness the audience insights coming from their platform and use them to offer advertisers targeted off-site ads (through their recently acquired MoPub ad network) then they might be able to deliver their investors a good return.

Freddie Young, community director, 1000heads

Twitter will be required to generate revenue in a way that it hasn’t in the past. It’s hard to escape the impression that this will mean more ads. The concern is that this will damage user experience and, crucially, the credibility of a platform that is relied upon for objective news-sharing. Twitter have already started innovating with their ad offering, for example Twitter Amplify, and users will hope that the route to higher revenues is via clever models like this – not saturating the timeline. Its subtle, native ad formats have been happily tolerated so far; the challenge for Twitter now is to generate more revenue without cluttering the interface and alienating users.

Dave Gilbert, media director, We Are Social

Twitter has already rolled out a number of major updates in a short amount of time in advance of today's IPO in a drive towards monetization, and this isn't going to slow down. Social media users are always reluctant to accept changes to a platform that they know and love, particularly when it involves advertising. Twitter should avoid major changes to its core product of delivering fast-moving, bite-sized information. If it focuses on making sure the ads it offers are very timely, relevant and add something to the user experience then any backlash from users should be minimal, and short lived.

Jon Myers VP and managing director EMEA, Marin Software

The challenge for Twitter is how can it accelerate the commercial returns for investors whilst, at the same time, not alienating its loyal user base. It needs to figure out how to innovate with new ad formats that deliver for brands without compromising the clean simplicity that made it popular in the first place. Looking to the future, I would expect it to experiment with different innovations and, if Facebook is anything to go by, take a few wrong turns along the way. Like Facebook, who are now above their initial IPO price, I expect them to strike the right balance in the long term through ad innovation, offering value for advertisers and investors alike.

Marc Blinder, EMEA director, social media strategy, Adobe

We’ve seen Twitter do some really innovative things in the ad space, even beating Facebook to some features which is really impressive. And due to the huge increase in second screen behaviour Twitter is extremely well positioned to capture TV spend in the long run. No one should take financial advice from a social media strategist, but I’m buying TWTR with an eye to the next two years when their ad model really matures. They’re growing revenues quickly, eventually the profits will come.

Abhay Singhal, co-founder and managing director EMEA, InMobi

As well as being big news for the tech industry, the Twitter IPO shows the vast amount of opportunities that exist in the mobile advertising industry as two-thirds of the company’s ad revenue comes from mobile, which equates to over half of its total revenue. When Twitter strengthened its mobile advertising credentials by buying MoPub, it not only showed how ambitious it is in this area but also its confidence in mobile advertising solutions. The acquisition was a great way to boost investor optimism as the IPO takes place. While the wider ecosystem will benefit from the IPO, the players that will benefit the most are those who can process a huge amount of mobile data signals on people's behaviour, context, location and other information in real-time. This can be leveraged to offer compelling creative solutions for brands to engage the consumer through a highly personal mobile channel.