Overview
Social TV is used to describe how people respond to television shows on social media. Increasingly people discuss TV programs and advertisements on social media platforms like Twitter and Facebook. Bluefin Labs was started by Deb Roy with an objective to monitor and measure social media activity related to television programs. The objective was to exploit a business opportunity to measure audience engagement through social media. The company bought data from Twitter and other social media sites and generated insights for TV networks and advertisers.
The Bluefin can measure the conversations both about shows and the commercials that run between the intervals and can provide instantaneous insights about the consumers’ thoughts and reactions. So it can provide real-time data for the networks to measure the trends regarding their programs whereas it can provide effective measures for the advertisers to gauge the performance of dollars spent on TV advertisements. Thus, on one hand, it can provide critical information to the broadcasters to help them selling advertisement time more effectively and on the other hand, it can help advertisers make better decisions about advertisement placement.
Twitter is the main source of Bluefin’s data. It is a real-time communication platform having over 200 million monthly active users and many renowned word figures like Pope also use twitter. However, just after 18 months into the launch of the company, the Twitter purchased the company for a figure around $100 million dollars. However, it is believed by some analysts that the owners sold the company too soon and it could have become the rivals to Nielsen in the TV audience measurement market and can turn its measurements into such a currency that without which it would have been impossible for the advertisement and media persons to do their jobs. However, the entrepreneurs believe that they could progress even rapidly under the Twitter and they can even work with their supposed rival, Nielsen and can work jointly for the product development.
Problems
The major problems that arise as a result of the deal are related to the usefulness of the Bluefin to Twitter and the advertisers.
As part of the deal, Twitter would continue to serve the existing clients but will not make any new contract and will focus on product development. However, there are several questions arises as a result of the deal. As Twitter itself is a huge advertisement medium so will it be fair for the advertisers and another advertising medium? Would clients still trust its analytic insights, or would they see them as puffery from the promotional arm of the Twitter, its parent? What might Twitter do with the Capabilities acquired through Bluefin and how would the founders feel about the ideas? And would the Bluefin’s entrepreneurial spark survive Twitter’s embrace?
Alternative Solutions
The major question is how the platform will remain useful for the Twitter after acquisition so that it can keep providing values to the customers. There can be the following three alternatives;
- Improve product offering of Bluefin and keep running it as a standalone company.
- Merge it with other Nielsen’s Social Guide and run it as a standalone company
- Use Bluefin’s algorithm and capabilities to develop its own sophisticated measurement ecosystem in order to improve its advertisement offering to the advertisers.
- Evaluation of Alternatives
- Improve product offering of Bluefin and keep running it as a standalone company.
This is a viable alternative because Bluefin has already started generating income in such a short time of just eighteen months. In the long run, provided that it is managed aggressively and appropriately, it has the potential to become a must-have thing for both advertisers and network administrators. Moreover, by adding similar data mining capabilities on other platforms like Facebook and LinkedIn etc., the company can improve its appeal to the advertisers.
- Merge it with other Nielsen’s SocialGuide and run it as a standalone company
Twitter already owns SocialGuide thanks to its relationship with the Nielsen. Using capabilities of Nielsen, Social Guide, its own and of Bluefin, Twitter can build a company measuring the effectiveness of not only TV advertisements but also of the advertisements on other social media sites. This can further improve the potential of both Bluefin and Social guide. Moreover, as soon after the Deal, Twitter was going to offer its IPO. It has the potential to increase the value of the company greatly.
- Use Bluefin’s algorithm and capabilities to develop its own sophisticated measurement ecosystem in order to improve its advertisement offering to the advertisers.
Then, Twitter has another great option. It also offers advertisement and so it can use Bluefin’s logo to gauge the effectiveness of its own marketing services for the advertisers. There is not much measurement available about the effectiveness of social media platforms and that is one of the hindrances why organizations still advertise more on traditional channels as compared to what they should actually spend on the basis of business trends. What it would also bring in is that it would also ensure that Twitter monetizes its data by itself and does not rely on other firms like Nielsen to monetize its data. Thus through Bluefin, a make measurement and broadcast measurement co-relation a differentiator. It would communicate effectively to the advertisers regarding their budget.
Recommendations
In light of the above analyses, it appears that the third alternative, “Use Bluefin’s algorithm and capabilities to develop its own sophisticated measurement ecosystem in order to improve its advertisement offering to the advertisers”, is the best option.
This is because it will improve the monetizing abilities of the data generated by Twitter. It would work with the market strategy of Twitter. Moreover, it would also provide Twitter with a huge competitive advantage as compared to other social media networks when it comes to providing value for money insights.
It is not expected to taint the information that Twitter owns it, rather the advertisers would benefit from the great insights that Bluefin logarithm can provide since Twitters ‘purpose is only to obtain information from Bluefin that can help it further penetrating the social TV market. As there is a close correlation among the people who watch tv and then tweets about it, so the Twitter can use this information to improve its own advertisements using the same data as clients may want twitter to show advertisements to the people discussing particular ad or TV show.
Moreover, in case the company selects the first two alternatives, it may be possible that the customers would no longer trust on insights provided by Bluefin considering they may be tainted. Also in order to improve the profit potential of the Bluefin, Twitter may need to invest heavily. However, it may still not provide it as much value as it can as being integrated part of its advertisement business.
As already mentioned, the capabilities of the Bluefin would work great in order to help Twitter penetrate the social TV market. Moreover, Twitter can also keep up the Entrepreneurial spark of the Bluefin founder and use it to improve the product that it can use to improve its own product offering. However, it can also sell the insights to other social media platforms as well.
Possible Results and Obstacles to Implementation
Apparently, there may not be any obstacles to the implementation of the suggested alternatives. This is because it is well thought out and did not cost Twitter much while having the potential to improve not only outcomes for the Twitter but also for the advertisers and Television Network. The only obstacle could be if the ex-owners of the Bluefin may leave the company if they feel the future of the Bluefin is not what was promised or what they considered would be after association with the Twitter.
The possible results could be great for Twitter as it can result in increasing its advertisement revenue by improving the effectiveness of the advertisement. So it can provide a significant competitive revenue growth for the Twitter.
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