There's a connection between Twitter going public and mHealth: mobile healthcare advertising.
Launching as a publicly-traded company before actually turning a profit, Twitter is now under huge pressure to earn money from its users, and healthcare presents big advertising opportunities along with some risks.
Indeed, many roads lead to mobile advertising – expected to hit almost $12 billion in 2014 and $50 billion in 2017, by Twitter’s estimates. It’s still a wide-open field among tech companies.
Twitter made a smoother introduction to mobile advertising than Facebook did and may have a simpler platform, but Facebook’s increased mobile ad profits recently impressed investors in the third quarter, and about half of both Facebook users and ad revenue is mobile.
Twitter, meanwhile, has some 230 million active users to Facebook’s 1 billion, with about 65 percent of Twitter’s revenue coming from mobile advertising and 75 percent of users Tweeting on a mobile device at least some of the time.
[See also: mHealth's great promise to ease the coming dearth of doctors.]
Health organizations use Twitter to tell their stories and reach patients and members. The Memorial Hermann Health System in Texas, for example, hosted the first Twittercast of an open heart surgery. Many clinicians and researchers Tweet the latest news on their medical interests and anecdotes from patient encounters. And then there are the consumers, Tweeting about their encounters with doctors, hospital and insurers, diet and exercise habits and the products they’re using.
But can any of that make Twitter money? For now, it seems many health organizations and health professionals get more value out of their relationship with Twitter than Twitter itself does.
With healthcare accounting for about 7 percent of direct consumer spending and with mobile becoming the main personal communications device and gateway to the Internet for many people, however, it may be too big a potential advertising source to ignore.
To date, Twitter has been “approaching it with caution,” said Melissa Barnes, Twitter’s head of agency and brand advocacy, at the 2012 Health 2.0 conference. “We really look at the companies that are doing it to assume that risk. We’re not letting pharmaceutical companies and things like that advertise because there’s still so much to be determined about the space and the regulations.”
Not that pharma isn’t reaching both healthcare professional and consumer audiences on Twitter; like other health organizations, the many pharmaceutical and life sciences companies hosting Tweet chats and garnering followers and media coverage are finding Twitter to be a fairly good outreach tool. They’re just not jumping into advertising.
Earlier this year, AstraZeneca, which hosted the first pharma Tweet chat in 2011, bought a number of sponsored Tweets linking to its YouTube page for Nexium, its gastroesophageal reflux disease drug, but ended up pulling the Twitter ads after concluding they were likely not in compliance with drug advertising restrictions. When the Tweets were expanded, the summary included the name of AstraZeneca’s product without required safety information, a nuance that could bedraggle advertising for regulated health products.
And Twitter and other social media and tech companies will face even more limitations outside the United States, which is one of few countries allowing direct-to-consumer drug advertising.
What remains largely unknown is the demographic specificity that Twitter offers to advertisers in any industry. While anyone can see any Tweet from a public account, Twitter’s search function isn’t capable of the type of analytics that companies can use to drive their consumer strategies.
There are third-party tools, however, mostly selectively chosen and certified by Twitter to be able to access the “firehose” of its data for mass analysis. One of those licensees, DataSift, sells companies real-time and historic access to public Tweets from 40 data fields, all of it able to be combined with analysis of other social media sites.
Bringing Twitter $47.5 million or about 16 percent of revenue in 2012, those data licensing fees are the company’s second largest source of revenue, and also an indication of its possible edge over Facebook, which hasn’t embraced data licensing and may not necessarily have the right data for it.
For mobile advertising to be successful in social media, consumers will have to accept it.
Already, as ads have become more common on Twitter, some users have been grumbling, and the company itself noted advertising acceptance as a risk factor in its Securities and Exchange Commission IPO filing: if “users believe that their experience is diminished as a result of the decisions we make with respect to the frequency, relevance and prominence of ads that we display.”
Whatever Twitter’s healthcare plans, co-founder and board chairman Jack Dorsey may still have an eye out for disrupting healthcare. Having turned over the executive reins of Twitter, Dorsey is now the CEO of Square, a business he founded that offers mobile payment platforms. He is now estimated to be a billionaire, at the age of 36, after Twitter’s IPO.
Att the 2010 DEMO Conference in Santa Clara, Calif., when asked about his long-term plans after Twitter and Square, Dorsey said: “Healthcare, there’s nothing more precious to us than our health.”
Twitter priced its shares at $26 the day before its IPO, aiming to raise $2.1 billion, and trading started at $45.10 and ended at $44.90, after reaching a high of $50.09.
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