Ken Wisnefski in The Street.com on Rumored Twitter Sale

The Street 2

Twitter (TWTR) investors are seeing a nice boost in share price today on rumors of a sale. Of the two companies looking to buy the troubled social media platform,Alphabet‘s (GOOGL) Google and Salesforce (CRM) , Alphabet appears to be the one most likely to be able leverage Twitter’s data and user base to drive revenue…

Google is one of the richest corporations in the world, and how it has amassed that fortune is primarily by selling ads that are related to people’s search queries. This is an extremely effective way to reach customers, because when you know exactly what somebody is searching for, you can deliver ads directly related to those queries. For some circumstances, it really is the only way to go.

But in other circumstances there is a different way to target customers and that’s using ads based on demographics, in Google’s case that’s called display ads. With demographics essentially you can reach users who you know have an interest in what you have to offer. When it comes to this type of advertising, Facebook (FB)  is king. Facebook knows your age, sex, behaviors, what you like, it knows what you like to talk about and even what you’ve said. On top of all that, Facebook buys information about its users from third parties to know even more about them.

Facebook uses all that information to match its users to the appropriate ads. Marketers supply Facebook with the info to match up to. And yes, it has been very profitable. In my own marketing agency, Facebook has begun to eat up a percentage of ad budgets typically slated for Google.
If Google is still looking for ways to compete with Facebook on display ads, while creating a more effective environment where marketers can choose specific user traits, then buying Twitter could be a real way forward for them.

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