How hockey and 'Mayochup' are helping to boost Twitter’s ad business

Twitter Inc.’s (TWTR.N) relationship with advertisers has come a long way in the seven years since Matt Derella joined the company.

“The conversation has changed,” Derella, Twitter’s global VP of content and revenue partnerships, told BNN Bloomberg in a television interview in Toronto. “There was a time when we were the new thing marketers were interested in trying out. Now, amongst the customers that are comfortable with bucking the status quo, we’re the primary choice to start a campaign.”

Twitter’s revenue has grown from roughly US$300 million in 2012 to more than US$3 billion last year. The business looks modest, when compared to Facebook, which generated more than US$55 billion in advertising last year.

But Derella says Twitter’s advantage with marketers is its status as the go-to platform for all things new.

“Twitter is a place where things start – memes and movements. More and more, brands are coming to us first … because the audience we have is very vocal, very influential. And it allows brands to understand what their customers want.”

Derella points to examples such as Kraft Heinz Co.’s “Mayochup,” a mashup of Heinz mayonnaise and ketchup. Last year, the company polled Twitter users to see if consumers would buy the combo product.

According to Twitter, the poll helped Heinz Ketchup’s Twitter account generate one billion impressions in two days. The positive response led to the product’s rollout in the U.S. And this week, Kraft Heinz went back to Twitter to spread the word on another offering called “Kranch,” which combines ketchup and ranch dressing.

“The conversations we’re having aren’t necessarily about a marketer’s specific campaign. It’s about their customers and understanding through the conversations on Twitter what their customers are doing,” Derella said.

Advertising veteran John Yorke, president of Rain43, says that Twitter offers brands a view into whether they are accepted in consumer culture. 

“Twitter can definitely be a swing and miss or a home run for a lot of advertisers, but all one has to ask themselves is: 'What does a miss cost me, versus what does a home run gain me?'” Yorke said in an email to BNN Bloomberg. 

Eighty-six per cent of Twitter’s revenue last year was directly tied to advertising, with the rest coming from data licensing. “Data is a great adjacent business that helps brands, academics, and businesses understand their customers better,” Derella said.

The growth of both the ad and data businesses comes as the company cracks down on some of the issues that Twitter faces, which can make marketers uncomfortable.

“We’ve seen abuse, we’ve seen harassment, we’ve seen people leave our platform because of it,” Twitter co-founder and CEO Jack Dorsey told BNN Bloomberg in a television interview.

“Conversational health” is Dorsey’s number one priority at the company. He is currently meeting with Twitter employees around the world, as part of a tour that will see him and other executives such as Derella visit 35 offices globally over the next year.

“We can’t build a platform of speech, a platform of conversation and a service that will remain relevant to people if people don’t feel safe to speak up in the first place,” Dorsey said.

Beyond being a place for marketers to test the appetite for new products like condiments, one of Twitter’s big growth drivers has been its content partnerships with media companies, which has boosted the amount of advertising revenue it generates from video.

“Recaps and highlights can be really powerful. We built an explore tab within the service that’s a way to catch up on what’s been happening. It’s usually a combination of video from the content creators themselves and it’s paired with the conversation that’s been bubbling up around that,” Derella said.

In Canada, Derella points to Twitter’s “Ice Surfing” partnership with Rogers Media’s Sportsnet, which gives Twitter users a live look at different hockey games.

“We’re like a sports bar,” said Derella. “It’s open 24/7. There’s always a game on. There’s always a conversation happening, sometimes with the coaches, the players, and sometimes the parents of the players. They’re all right there to engage in the conversation.”