Happy Twitterversary

Eight years ago today I tweeted for the first time.

To celebrate, Twitter lost 24% of its market value yesterday.

Twitter hatches

Although I didn't remember exactly what I tweeted that first time back in 2007, nor the exact date, I very clearly remembered the circumstances.  Twitter had suddenly taken SXSW by storm the month before.  I was on a business trip to Europe, reading an article about it in The Economist and decided to give it a try.

Signing up back then was very different:  You SMS'd to 40404 and by exchanging text messages you established a username and got started.  Coincidentally, just the other day I discovered a site that will find your first tweet.  I entered @SteveS1 and suddenly it all came back to me:

(Yes, I misspelled "coffee".  So sue me.)

Twitter lays an egg of its own

Yesterday afternoon Twitter's stock price was a fairly typical $51.19, but then their (somewhat) disappointing 1st quarter results came out prematurely and a day later shares are trading at $38.98.  That's about a 24% decline, not far from where it was on Day 1.

Is that bad?  Not really, for two reasons.

First, this news puts Twitter in proper company with the rest of the tech world, subject to the slings and arrows of outrageous fortune.  Just because Twitter is famous doesn't mean its stock won't go up or down.

Second, they're still racking up some impressive ad revenue, "only" $435.9 million in 1st quarter, which was 74% above the same quarter a year earlier.  Yes, it was a drop from the previous quarter, but their chief sin seems to have been missing financial analysts' expectations, which were more like $456.8 million.

The real question is whether this news represents a real weakness in ability to attract ad revenue.  Or as Twitter CEO Dick Costolo put it, the company had a "demand problem".  Here again, they're in proper company.  Many emerging media platforms have this problem, because advertisers aren't sure how or whether a new medium fits in their overall mix.

I'm not an investor in Twitter, so I can watch this play out with merely professional curiosity — what about you?  Any thoughts on the future of Twitter?

Display Ads: the New Subliminal Advertising

In the days of Ye Olde Marketing there was a belief in "subliminal advertising" -- the idea that TV commercials would be spliced with fleeting images, usually sexual, to overpower your psyche and make you buy something you didn't need.

Although the science behind subliminal stimuli is interesting, it's never really been used in advertising and we have no examples of it ever working.  Most of the urban legend is based on a 1957 movie theater experiment that never actually happened.  

Comedian Steven Wright sent this up with one of his 1980s one-liners:  "I saw a Subliminal Advertising executive….but only for a second."

Online Display is the New Subliminal Advertising

This all came to mind when reading the Internet Advertising Bureau's latest viewability standards:  "Desktop display ads to be considered viewable if 50% of their pixels are in view for a minimum of one second."

Banner ad?
I didn't see any
banner ad.

50% of the ad for just one second.  We used to call that subliminal advertising.

In a not very subliminal display of honesty, the IAB press release on this topic is headlined "100% Viewability Measurement Is Not Yet Possible".

Advertisers know this, as Kraft says it rejects 75-85% of online ad impressions and Google says 56% of online impressions actually aren't seen.

It's Like We Never Noticed This Before

How did we get to this point?

The Internet didn't used to allow advertising at all, banning it until 1991.  The first form of advertising was actually email — yes, direct mail — which as we all know spawned spam.  The first clickable display ad came in 1993, and in 1994 Wired started selling banner ads to clients like AT&T, with a click-through rate of 44% (no, that's not a typo, and we should point out that the click bait was an online tour of seven of the world's most acclaimed art museums).

These initial approaches revealed a direct-response mindset, and unrealistic expectations as to how perfectly measurable advertising would be on the Internet.  Not quite!  As click-through rates have dropped to infinitesimal numbers, online display has gone from marketing's Holy Grail to just billboards posted on the Information Superhighway.  Today's tools don't consistently measure page takeovers, road blocks and other customized placements.  As IAB president Randall Rothenberg said, "Different ad units, browsers, ad placements, vendors and measurement methodologies yield wildly different viewability numbers."  If you were expecting an accounting exercise that neatly reconciled everything, we don't have one.

The goal is "100% viewability" and at some point we'll get there.  In the meantime there will be some tough discussions among advertisers, agencies, media and researchers.  

Meanwhile, the irony is that an urban legend from 1957 is reality in 2015.