A Twitter (TWTR) IPO is imminent and looks likely to cement the social network’s future — good news for pharma marketers that increasingly see the network as an important place to engage HCPs and the public.
The world’s second favourite social networking platform is expected to list on the New York Stock Exchange sometime this week, hoping to raise up to $1.75 billion against a valuation as high as $13.5 billion. That’s $13.50 for each of its registered users, or maybe more realistically, $54 dollars for every one of the 250 million people who use the site regularly.
Twitter is on track to be the world’s second biggest tech listing ever, behind Facebook, but ahead of Google. Executives at the seven-year old microblogging site are approaching their IPO a little more conservatively than their friends over at Facebook, who’s May 2012 IPO went somewhat less than smoothly. The Twitter team is hoping to avoid the technical glitches that haunted Facebook’s NASDAQ listing, by listing on the less tech-centric NYSE.
The numbers for Twitter are also less aggressive – a $1.75 billion initial offering compared with a $16 billion initial offering from Facebook; and valuation based on 10 times forward revenues, versus a multiple of 20 or so for Facebook.
There are those that say Twitter should be looking to be more like it’s bigger brother; although Facebook share prices were shaky at first, they have done well since on positive mobile advertising figures. And as the IPO approaches, Twitter’s IPO share price is moving up, from a start of $17 to as much as $25.
“We’ve seen this before,” said Santosh Rao, an analyst at Greencrest Capital Management LLC in a Bloomberg report ahead of the listing. “Where companies start off with a low number to get people interested, and then work higher.” But Rao believes the interest is there to support the higher price. “The demand is there as this is the last of the big three social networks to go public.”
The exact numbers and the relative merits of Twitter and Facebook’s approach to IPO will be figured out in the coming months. For now it’s important to know that the Twitter IPO looks set for success and that the company is building a long-term strategy — one that shouldn’t cause pharma marketers any problems.
Pharma appears to have invested in Twitter as the sector’s social network of choice. Writing on the Healthworks Collective site at the end of October, Paul Tunnah of pharmaphorum said Twitter “is quietly forging a good niche in helping companies engage with their customers” and “savvy pharmaceutical companies are starting to recognise some of the unique aspects of Twitter that make it ideal for engaging with healthcare stakeholders, patients and the public.”
Paul focused on the ‘tweetchat’ as a particularly useful channel for pharma. He describes a tweetchat as a cross between a conference call and a cocktail party, with Twitter users gathering at a prearranged time to discuss an agreed topic, but often developing into multiple groups to have separate, related conversations. “Some pharmaceutical companies have therefore embarked on running tweetchats to gain a better understanding of issues relating to particular disease areas and enhance their reputation within them,” he said.
The tweetchat is a form that developed organically by the Twitter community around the hashtag facility, but ahead of the IPO and beyond, Twitter is taking its own steps to increase the value of the platform to marketers.
Most recently, Twitter launched a feature that will enable marketers to that add images and video previews to promoted tweets. Previously, a user had to choose to view attached media, but it will now appear automatically on a user’s timeline. Twitter has denied any commercial motivation for the move, sensitive to criticism that images and videos appearing in a twitter stream can be intrusive. But the promotional benefits of attention grabbing visuals are obvious; they have basically provided advertisers with a format not dissimilar to the banner ad.
Promoted tweets make up the bulk of Twitters’ revenue at the moment, but the site is also developing a lead generation tool and a system that will help marketers measure and improve conversion of social traffic to their own websites. The company is also looking very closely at TV tie-ins, acquiring Bluefin, a company that analyses the use of social media with TV.
Post IPO, with money in the bank, Twitter is likely to be eyeing up other acquisition targets to bolster future earnings potential. It will be interesting to see if any of these purchases bolster Twitter’s position in the pharma marketing space.