Here’s What Twitter Needs To Do To Win Over Local Businesses

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twitter-bird-blue-on-whiteAs Twitter hits the road to sell its stock to the public, the company’s monetization plans will take center stage. For Twitter’s stock to perform as well as that of LinkedIn or Facebook, the company will have to focus on growing its active user base, monetize its international users, grow mobile offerings and make money off initiatives like #music and Vine. But it will also have to crack one of the  white whales of consumer tech: the local market.

While more than a third of digital dollars in the local segment are spent on search, social media’s share of local ad spend has been on the rise. Meanwhile, analysts such as Pivotal Research’s Brian Wieser believe that small business spending on Facebook now accounts “a significant source of the company’s recent revenue gains.” The question for Twitter is whether it can make a must buy for local businesses like Google and now, Facebook.

Marketers Go Where Customers Are
With over 100 million active users, there’s little question that businesses can benefit by having an organic presence on Twitter. However, the company needs to develop the tools and technology to create a valuable organic experience, building the same community of local businesses on the platform, which Facebook has done in the year before and after its IPO.

“Businesses have an obligation to meet customers where they are, and there’s no doubting that customers are on Twitter,” says Rob Reed, the founder of MomentFeed, a platform that helps brands connect with customers in local areas. Reed recommends that businesses use the network to engage actively with customers, taking advantage of it as a customer service channel.

Of course, Twitter’s most notable organic feature is the hashtag. Chris Marentis, the CEO of SureFire Social says that local businesses should always be looking to exploit the viral nature of the feature, creating appropriate category and brand-specific trending hashtags. “Then, their hyperlocal constituents such as contractors, dealers, franchises ride these hashtags and get more visibility for their tweets,” he adds.

Moving From Organic To Paid
Of course, having an organic presence on Twitter is all very good. However, for Twitter to have a really successful IPO, it will have to get local businesses spending on its platform by refitting its existing ad products to the needs of local business.

Today, Twitter offers three type of ads to its advertisers — promoted tweets (to get a message out), promoted accounts (to build followers) and promoted trends (more applicable to larger brands with larger budgets). While pundits have praised these units for their ability to seamlessly integrate with the actual Twitter user experience, it’s still unclear how much value they deliver for local advertisers.

“Right now with Twitter advertisements, it’s hard to pinpoint who exactly sees an ad,” says Trevor Sumner, president at LocalVox Media, a marketing platform for small businesses. “Advertisers can’t really target localized ZIP codes and smaller towns. Ultimately the platform leaves the business owner questioning if the ads are showing up to the correct audience.”

However, the company has rolled out new ad formats in recent months that might make the platform more attractive to local businesses, according to Marentis. He says the two month-old lead generation ad unit, which allows users to sign up for deals from within their Twitter account, could work especially well for local advertisers. “Businesses should start experimenting with the lead card around seasonality, new product launches and other time specific events,” he recommends.

Becoming A “Must Buy” For Local Businesses
Innovations like the lead generation ad unit are a step in the right direction, but the social network clearly has a lot more to do to become a “must buy” for local businesses.

For one, the company might want to start by improving basic features that make the organic product more useful for small businesses. Sumner says that real time analytics on clicks and reach would really help business owners to learn about a business’s audience and influence. “Google/Facebook-like features to optimize campaigns based on different objectives like clicks, conversions or comments would be exciting,” he added.

Once those are set, an obvious area of innovation for both brands and small businesses alike would be to add better location-related targeting capabilities into Twitter’s ad offerings. Beyond geofencing, Reed says “the ability for users to tag Tweets to places, as one can do with Instagram content… would open up a valuable local channel for Twitter.”

According to Marentis, who has met with the head of Twitter’s small business initiative, retargeting is an area of focus for the company. With the acquisition of MoPub in September, Twitter now has the potential serve ads across the programmatic buying network based on what people tweet about, who they follow, data, which Reed says, will ultimately provide value to advertisers.

There’s obviously a long list of items that Twitter needs to incorporate into its future roadmap to become a “must buy for local businesses.” But like Facebook is fast discovering, the effort might very well be worth it.

Arun Krishnan is a marketing consultant living in Amman, Jordan. He was previously the VP of Marketing and Communications for Pontiflex.