Twitter has been making headlines globally in the past few months amid a series of executive changes and stock market falls. Mumbrella’s Nic Christensen talked to its Australian boss Karen Stocks about its local performance and future strategy in this market.
“Twitter is now embedded in everything we do from an Australian cultural perspective,” declares Karen Stocks, as we sit down. “There is no sporting event that doesn’t have a Twitter integration, there are no TV shows that don’t have it – it is just part of the Australian psyche now.”
You can say what you want about Twitter as a platform but there’s no doubting its Australian boss’ confidence in what she views as its rightful place in the local media landscape.
This week Twitter moved into a new bigger office in Sydney – which was opened with great fanfare by NSW Premier Mike Baird – an event Stocks said marked an important milestone in its nearly three years of operations here.
From a pokey CBD office where Stocks says they were literally tripping over each other, Twitter Australia now has a whole refurbished floor in one of the biggest office towers in Sydney.
“This is such a big deal for us,” says Stocks. “We have been planning for about 12 months. When Twitter opens up offices globally it is really important for us to have that startup vibe.
“We started up in one office on this floor, in the corner tripping over each other. We then moved into serviced offices and it had that start up feel of being scrappy but then as the team grows, and matures, you need to become more mature as a business.”
The lack of Twitter numbers
However, getting a precise read on the maturity of the business in Australia is tricky.
Twitter Australia’s local operation employs around 50 people and the new office is clearly a signal of intent.
There is plenty of room for growth, with lots of additional office space – Twitter says the floor can easily hold 100 plus staff.
But questions are being asked as to whether it has the business model to sustain that sort of local representation? Where are its local numbers up to?
“We don’t breakout country numbers,” says Stocks, maintaining a line the company has long held around refusing to give geographical breakdowns.
“But we are really happy with what we have achieved in Australia. It’s hard to believe that we have only been here for two years,” she adds.
Stocks instead points to the strength of its audience in certain niches pointing to key areas like music, gaming, politics and media.
“We do have pockets of strength around our audiences and if we look at key ones that we have it’s things like young females who are really involved in music, males that watch sport are again very big,” she says. “Gaming is huge so more of the younger males and then you have things like politics/news.”
With Twitter’s strength among the media and in particular journalists, thanks to its usefulness as a breaking news source, the platform often dominates headlines both in media but also in the political realm.
“When it comes to politicians the hashtag #auspol is the third highest global political hashtag in the world,” she reveals.
“It has trended in the top hashtags in the world for a couple of years. I couldn’t be more pleased with the way Australia has embraced Twitter.”
That may be the case but some in the advertising world question whether the platform has a broad enough audience to achieve the results it promises, particularly, as its local operation seeks to try and compete with the sales forces of the online behemoths Google and Facebook.
“Twitter has shifted its narrative to clients from one around engagement and brand to one around direct results,” says one senior agency executive, who declined to be named. “But I’m not sure clients are sold on the breadth of the local audience – when I spend $1 of client money on Facebook I know I’ll get $1.50 back, with Twitter I’m not sure that’s the case.”
Despite some hesitancy in market, Twitter Australia appears to be seeing results in terms of sales.
According to Standard Media Index, which records the spend of major Australian media agencies, Twitter’s Australian revenue has gone from $480,000 in 2013, to $4.46m in 2014, doubling to $8.095m in 2015.
That figure doesn’t represent direct sales, which agency sources estimate likely constitutes another 40% on top of SMI figures, meaning the local operation may well be at or close to profitability after local salaries and office space are deducted.
Stocks declined to comment on Twitter’s financial performance, noting that they were currently in blackout period ahead of the release of US results, but said she was pleased with the results the local sales team was seeing.
“There has been an over 300% increase in the number of advertisers using the platform,” says Stocks.
“And the other thing I’m most pleased about is when I think of what advertisers do in Australia they are actually globally innovative,” she says citing the likes of Disney, Samsung and ANZ Bank as case studies of local brands doing innovative things on the platform.
Stocks notes how with the release of movie blockbuster Star Wars: The Force Awakens the local Disney office asked Australia to vote on Twitter for either the light side or dark side.
“They had an outside billboard showing the ratio of what people were tweeting in real time,” said Stocks.
“They were the only Disney company in the world that has done that type of (digital/outdoor) integration and it was done here in Australia.
“When I go and talk about best practice globally it’s Australian case studies that are used. I think that’s a great representation of how innovative Australian businesses are. That delights me so much.”
A new local base from which to sell the market
For Stocks the new office with its enormous amounts of open space (the company is considering subleasing some of the space in the short term), classrooms, kitchen areas, mother’s room, library and celebrity green room, renamed the “blue room” to match Twitter’s colours, are designed for the next stage of platform’s life cycle.
“The big key highlights for me is that this is a place we can bring our partners, agencies and advertisers,” she says. “Before we haven’t been able to bring the external world into Twitter and its nice that we can do that.
“And in such a lovely place that we are proud of.”
To sell that message yesterday Twitter invited a number of agencies to tweet under the hashtag #spreadourwings.
Asked if she believes agencies and, in particular, marketers understand the Twitter medium and believe in its potential for marketing Stocks responds: “I would say you have a range of knowledge levels in how to best use it.
“We have some marketers that we are having introductory conversations with and we have a lot really big marketers who get the platform really, really well.
“We are having very, very advanced discussions with them but we are constantly going back to marketers and updating them on the latest things. I find the best marketers are those that are open minded and are open for new ideas.”
However, many senior marketers and media agency executives tell Mumbrella there is some reticence around the effectiveness of the medium.
“Twitter has struggled with its sales proposition in Australia,” says one senior media agency trader. “It is not clear on what it wants to be from a consumer perspective.
“Is it a social, content or video business? If the platform is not sure, then commercially that is challenging and therefore not a surprise that that the dollars are not following. Although it is placed in the same bucket as Facebook and Google, it is not.”
This is also borne out in the SMI data where Twitter’s revenues significantly trailed the behemoths of Google and Facebook – which are at $455m and $101.6m respectively in agency sales alone in Australia as of July last year. Direct sales for the platforms are thought to be as high as a billion and half billion respective.
Against that scale, even if Twitter is at $12m in sales, it has a long way to go to catch up to the big boys.
Can Moments help boost Twitter’s traction in this market?
Building more widespread appeal has always been Twitter’s main challenge in Australia. A point it has aggressively pursued through media partnerships with TV, radio, print and online and also through sport.
While the likes of Facebook claims some 14m-15m local users and Google is essentially dominant among almost all online Australians, Twitter has arguably struggled to grow beyond a core base of users.
While Stocks won’t be drawn on the number of Australian users, the social platform was understood to have been touting a figure of some 4m local accounts back in 2014, and it is thought that the user growth has been slow since despite major pushes on TV and sport.
However, other university research studies put the number of local users at closer to 2.8m.
“We will continue to talk to our audiences as we do and do research in the market,” says Stocks.
“We will work with the product because there is a lot of content there and ask how do we bring that more easily to people? How do we remove the friction in the process and make great content much easier to find? One of the things we will be launching soon is Moments.”
Twitter Moments was launched in 23 markets earlier this year make trending tweets accessible to visitors without requiring them to create an account or sign in – effectively turning Twitter into an all-around news aggregation site.
Twitter Moments editor Hopewell.
“We have Luke Hopewell who is heading up the Moments team here,” says the Australian Twitter boss, referencing the former Gizmodo Australia editor who just joined.
“It’s a way for users who don’t necessarily want to dive in and find content to have it surface for them but still keep the unique real time feel and the open and public nature of it.
“It will offer a different way to have the Twitter experience. You will get some people who will not necessarily want to spend a lot of time in the Twitter app who want a light experience and that caters to them well.”
One of the challenges for Twitter is that a large part of the population often only hears about the platform through negative stories in the media or as a place used by online trolls to attack others – like the case of former Labor Leader Mark Latham who was caught abusing prominent females on the platform.
Does Stocks believe online trolling and the headlines it generates hurts the medium and its ability to attract new people to it?
“You just need one Mark Latham thing and that does blow up,” she concedes. “But when you look at what percentage of that is on the platform – it is so infinitesimal.
“That doesn’t mean we don’t take it seriously, because we want people on Twitter to have an experience where they feel comfortable and safe. We will continue to focus on it to make sure we are pushing that agenda really hard.”
Where to next for Twitter in Australia?
The return of founder Jack Dorsey as CEO of Twitter drew many headlines last year and the global media continues to have the magnifying glass. Sharp falls in its stock price in recent months have not helped – with the stock that traded at US$48 a year ago now commanding a price of just US$17 giving the business a market capitalisation of US$11.3bn.
Twitter’s stock performance since its IPO in November 2013. (Click to enlarge)
On the day we meet, Business Insider published leaked Twitter API data that claimed to show the number of tweets on Twitter was in serious decline. Stocks says she isn’t in a position to comment on the leak.
While last week’s departures of Twitter’s vice-president of engineering Alex Roetter, vice-president of global media Katie Jacobs Stanton, HR vice-president Skip Schipper and senior vice-president of product Kevin Weil also drew global headlines coming on the back of a major global round of redundancies, which saw job losses in Australia – including news and government manager Flip Prior.
Do those changes have an impact on the local business operation and local morale?
“Businesses do go through changes and it’s very important that we constantly look at our structures to ensure we are being the best we can,” acknowledges Stocks.
“We have to move teams together to become more nimble and efficient and serve our customers. The teams understand that – change is hard but when positioned in the right way to people they understand and they are very excited about the future for Twitter.”
As we wrap up I ask Stocks – who has been in the role for two and half years – what her aspiration is for the business.
The Twitter Australia boss says he wants to see the business keep evolving, to ensure her employees are happy and fulfilled, and then adds: “My third priority is to have Australia as the beacon office for Twitter.
“When we look at Twitter globally I want people to be able to look at Australia and go ‘yeah they are doing a great job down there’. I think it’s great for the people to be recognised and acknowledged for the wonderful work they are doing.”
In this market, Twitter still has a long way to go but Stocks, despite numerous challenges and obstacles, appears intent on powering forward.
Nic Christensen is the media and technology editor of Mumbrella.