MKTG 431.101
Twitter
December 4, 2012
Meagan Andresen
Ryan Blemings
Josh King
Lolita McKay
Joe Ruggiero
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General Information
The Development of Twitter
The idea for Twitter stemmed from a day of brainstorming among board members at a
company called Odeo that specialized in podcasting. Jack Dorsey, an undergraduate at the time
at New York University, envisioned a way to socialize with a small group of people in the form
of an SMS text message. This way, users could send and receive information from any location
using their cell phones (“The Engineering behind Twitter’s”). While thinking of potential names
for the project, Dorsey and colleagues browsed the dictionary and came across the word
“twitter”. The LA Times describes that “the definition was ‘a short burst of inconsequential
information’ and ‘chirps from birds.’ And that’s exactly what the product was” (Sarno). Dorsey’s
colleagues at Odeo, Evan Williams and Biz Stone, also played a part in the initial development
of the idea.
The initial prototype for Twitter was initially used internally at Odeo. The full version
was introduced publically in July of 2006, but Twitter’s popularity would not flourish until 2007
at the South by Southwest Interactive Conference. Newsweek’s Steven Levy commented, “The
Twitter people cleverly placed two 60-inch plasma screens in the conference hallways,
exclusively streaming Twitter messages. Hundreds of conference-goers kept tabs on each other
via constant twitters. Panelists and speakers mentioned the service, and bloggers in attendance
touted it.” It was even discovered that Twitter usage increased from 20,000 tweets per day to
60,000 per day during the event (Levy). This marked the beginning of big things to come for the
company.
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Since then, Twitter has experienced many redesigns including logo changes. Throughout
these progressions, the company has also experienced immense growth. In 2007, it was recorded
that 400,000 tweets were posted per quarter. That number grew tremendously in 2008 to 100
million tweets per quarter (Beaumont). As of 2012, Twitter has over 500 million users
worldwide and generates more than 340 million tweets per day (Dugan). From its humble
beginnings as a mere idea of a way to keep in touch with peers, Twitter has and continues to
endure enormous growth year to year.
Overview of Twitter
Twitter is a form of blogging through a use of brief, short messages typed like instant
messages. Referred to as microblogging, broadcasted posts are brief, and always limited to no
more than 140 characters. Users who post on twitter implement hash tags to relate their post to
any random topic or subtopic, as well as tag other twitter users in responses; making twitter posts
turn into what can be seen as a conversation.
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(Pictured above: a post of McDonald’s twitter feed. McDonald’s is shown interacting
with other Twitter users. Source: https://twitter.com/McDonalds)
Today, it has grown into much more than a simple tool to type in quick status updates.
Twitter is an information network that brings people closer to what’s important to them. People
can communicate and stay connected through the exchange of quick, frequent posts to share
what is going on in their lives. Every day, millions of people turn to Twitter to connect to
interests, share information, and find out what's presently occurring in the world. Twitter is a
real-time information network that connects people with the latest stories, ideas, opinions, news
about what they find interesting and for those who may be in the midst of a newsworthy event,
crisis, or natural disaster.
Twitter offers a unique combination of open, public, and unfiltered Tweets delivered in a
simple format, allowing Twitter users to share and discover what’s happening from almost any
personal mobile device. Users can customize their Twitter experience by using any of the Twitter
apps for iPhone, iPad, Android, BlackBerry and Windows 7.
Any Twitter user can read, write and share messages of up to the standardized 140character unit. These messages, or Tweets, are available to those interested in reading them,
whether logged in or not. Users who don’t have a Twitter can still see what twitter accounts post,
however, they are unable to comment or post anything of their own to it. In addition, photos
videos, music, web links, hot topics (using # hash tags) and conversations can all be tagged
directly in Tweets to get the whole story at a glance, and all in one place.
To connect with Twitter users, a Twitter account holder simply “follows” people, who in
turn can decide if they want to follow that Twitter user, in return. Following other Twitter users
means the account holder sees on their twitter feed all updates and posts made by those they
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follow. Followers receive all messages (tweets) in their timeline (a feed of all the accounts they
have subscribed to or follow on Twitter). Tweets represent conversations about any imaginable
topic. For example, Twitter posts became relevant to the wide-spread media coverage of events
happening during the number of linked results and protests soon called the “Arab Spring”:
“Many users view Twitter as the epitome of freedom of expression. It's not only played a crucial
role in the way we've communicated for the last five and a half years, it's also been part of
movements like Iran's Green Revolution and the Arab Spring” (Steele, 2012).
Purpose of Twitter
Businesses use Twitter for a variety of applications. Having a Twitter account helps keep
a company’s name in front of potential customers and helps greatly in building an online
presence in today’s world. Twitter is also helpful in promoting new products or services.
Additionally, because users can interact directly with businesses on Twitter, it is also a very
useful tool for receiving customer feedback or helping to resolve issues or complaints.
Advertising on Twitter is becoming increasingly relevant as the company looks for
additional sources of revenue. Currently, there are three types of advertising on Twitter:
Promoted Tweets, Promoted Trends and Promoted Accounts (“Start Advertising”). Promoted
Tweets essentially extend the reach of a selected post to a large audience. Promoted Trends help
to drive conversation about a company’s brand by encouraging Twitter users to discuss a certain
topic related to a business. Promoted Accounts are suggested to users, and help to directly build
followers, thereby increasing exposure to future posts. All three of these methods of advertising
are highly customizable and targetable, so businesses have the flexibility to manage campaigns
around their specific budget, and target specific demographic groups (“Start Advertising”).
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Company Worth
Twitter is not a public company yet and Facebook’s recent implosion has definitely given
executives a reason to hold back on a potential initial public offering. The ticker symbol, TWIT
is currently available, so it is possible that the company could go public within a matter of years.
According to WealthLift, with its most recent bundle of funding, as of August 2012, it seems that
Twitter is worth between approximately $8 and $10 billion. These numbers were found widely
among sources and are calculated based on 2016 sales estimates (Mann). Until the company is
made public, Twitter’s income statements do not have to be released to the public.
Twitter’s Relationship with the Media
In the short number of years within the mainstream social network, Twitter has formed a
surprisingly tight and symbiotic relationship with the media. Twitter believes the
accomplishment is because of two reasons: The first being its use as a form of real-time
newswire for information about events, such as the Arab Spring, and the upcoming U.S. election,
and also because it gives journalists an easy way to extend their personal brands into the social
web (Ingram, 2012). Twitter seems to be pleased with its relationships with media entities such
as NBC and MTV. The company worked closely with NBC during the recent 2012 Summer
Olympics. It has been quoted that “While NBC Universal officials said money between the
social media site and the programmer was not exchanged in the deal, Twitter stands to gain users
and advertising revenue” (Pacheco, 2012).
Pepsi and Twitter Ad Campaign and Partnership
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This year, Twitter and Pepsi announced the global partnership between the two
companies and the next phase of the Pepsi ‘Live for Now’ campaign. This is all about living life
to the fullest; the three-part Pepsi campaign focuses on sharing music through Twitter. An
attempt to refresh its brand and image, the Pepsi ad campaign focuses on the excitement of
young soda drinkers living in the moment, worrying less about the past and the future, and
focusing more on being positive and maximizing enjoyment of the present. For Twitter to gain a
major advertiser like Pepsi furthers its efforts to work with other advertisers and agencies. Pepsi
analyzes weekly the music-related Twitter posts of its American users, and publishes a video
commentary (also on Twitter) about what music people talk about most. The company gives
away music downloads and live-streamed concerts on Twitter. The vice president (Joel
Lunenfeld) for global brand strategy at Twitter, said the focus on music was a natural choice for
Pepsi, given the large number of Twitter users follow at least one musician on the site (Vega,
2012). Twitter is looking for big content areas that people discuss, relating mostly to current
events and popular culture, and retweet it.
The End of the Twitter and LinkedIn Partnership
As Twitter grew in relevance, its interface has become more accessible by an increasing
number of social media websites. LinkedIn, a professional networking site for mostly whitecollar workers, added the additional support of Twitter users having their Twitter feeds displayed
on their LinkedIn profile page. This feature was removed in late 2012, however, with the reason
being stated by Twitter that Twitter feeds are to be accessible only on the Twitter website. As
stated, “Twitter has been gradually moving to push out partners who display tweets on their
websites, but those efforts have been primarily focused on mobile clients, where Twitter's been
emphasizing its own offerings” (Thomas, 2012). Therefore, Twitter has dropped its two-and-a-
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half-year-old partnership with LinkedIn. Now, users can only post updates on LinkedIn and
broadcast those updates to Twitter, but Twitter feeds are no longer broadcasted on LinkedIn.
Interestingly though, Twitters own Facebook app cross-posts tweets to users' Facebook profiles,
which was the same partnership Twitter severed with LinkedIn.
Company Statistics
Unlike competing websites such as Google and Facebook, advertising on Twitter is
relatively new, and as such businesses have yet to accurately gauge the value of doing so
(Black). In 2011, Twitter received around $134 million in advertising revenue (Black). This
amount is relatively small in comparison to the $5.5 billion in total social media advertising
revenue that same year (Gaudin). In an effort to boost revenue, Twitter launched a marketing
program in May of 2012 aimed directly at small businesses. Several businesses were offered a
$100 credit to advertise on Twitter, in hopes of getting more people interested in their programs.
Results have been mixed, with small businesses happy with the results of their campaigns, and
some sorely disappointed (Black). The company aims to continue to monitor this and other
initiatives in the future in hopes of appealing to as many businesses as possible.
Best Practices
Many of Twitter’s best features are being leveraged effectively by businesses without
paid advertising, however. Most experts seem to agree that consistently engaging directly with
customers should be a priority. Actively monitoring Tweet responses and looking for ways to
improve response should be done on a regular basis (Fitzpatrick). Specifically, with respect to
marketing campaigns, using code words or coupon codes that are exclusive to Twitter
promotions is a good way of monitoring customer interest. Redemption rates can then be
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analyzed to determine the impact of Twitter on the campaign (King). In an effort to stand out,
businesses are also starting to build human personalities for their brands on Twitter. By not
talking exclusively about products and services related to the business, and maintaining a casual
conversational tone with posts, users tend to be more likely to interact with and respond to posts
(Fitzpatrick).
Twitter Complementing Traditional Media
While Twitter can be a very useful tool for businesses, it should not be viewed as a standalone tool, or destination for the end consumer. In order to effectively compliment traditional
advertising and promotions, it is generally recommended that businesses first establish a web
presence before investing heavily in Twitter (Goldberg). Establishing that presence, followers
that are attracted to your page, blog, or Facebook can be directed to your website to make a
purchase. Businesses advertising through other means such as television or newspaper also have
the opportunity to direct users to their Twitter by including their account name or URL on the
advertisement. Twitter also works well as a venue to resolve any complaints or issues customers
have, as mentioned earlier. As such, if a sale or promotion through television or newspaper
advertising is generating a great increase in sales, working on Twitter to promptly resolve any
issues customers may bring to light is essential.
McDonald’s Company Background
McDonald’s (NAICS code 722211, Limited-Service Restaurants) is known world-wide
as the largest chain of hamburger fast food restaurants. First established in 1940 as a barbecue
restaurant opened by Richard and Maurice McDonald, it quickly grew into a franchise with
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multiple locations. By 1955, businessman Ray Kroc joined the business, and eventually
purchased the chain and oversaw its worldwide growth.
All McDonald’s restaurants are operated by a franchisee, affiliate, or the corporation
itself. Its menu offerings have expanded beyond just offering burgers, fries, soft drinks, and now
include breakfast items, salads, snack wraps, and coffee and espresso beverages. Everything
produced by McDonald’s is made in a production line method. Ray Kroc came up with the idea
of making all McDonald’s foods keeping the same uniform consistency and taste, no matter
where you purchase one. For example, a McDonald’s Big Mac purchased in the U.S. will taste
the same as a Big Mac purchased in Japan. This unified brand recognition and familiarity has
been McDonald’s key to success and growth at the global level, with their target market being
young children, families, and youth within all 123 countries that currently have a McDonald’s
restaurant.
Currently, McDonald’s owns over 34,000 locations worldwide and in 2011 made over
US$27 billion in revenue, has an operating income of $8.5 billion, and owns a total of $32 billion
in assets, with over $14 billion in equity. Over 420,000 employees work for McDonald’s
worldwide (Hoover’s, 2012).
Target Marketing
Since its incorporation, McDonald’s has always been branded as a family-friendly
restaurant. Aimed at appealing to families and youth, its convenience for the busy family and
low prices allow it to be a convenient, enjoyable hang out spot for those who come in to the
restaurant. It could be said that McDonald’s target market is every demographic in every age
group, but the staple demographics come from youth and families.
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As McDonald’s grew into a national chain, the company began realizing the effect of
children factoring into the decision making process when it comes to dining out. Children will
want to go to a restaurant that is entertaining and appealing to them. McDonald’s capitalized on
this through the introduction of the now world-famous happy meal. Since its introduction in
1979, as well as the use of the company’s ‘spokesperson’, Ronald McDonald, McDonald’s
sealed the deal in becoming a household name by grabbing the attention of children all over the
world with meals that come with a toy and food that children will want to eat.
Still wanting to capitalize on the youth demographic, McDonald’s markets to youth with
a series of late night ads targeting teens and young adult audiences. The commercial segments
for youth mention the dollar menu, and that most locations are open late, highlighting the
restaurant as a hip place to hang out when going out late at night.
Between children and youth, McDonald’s will always perpetually spend a majority of
marketing dollars on younger and younger household decision influencers to try and attract the
entire family to come.
Competition
McDonald’s has the competitive advantage of being the largest quick-serve restaurant in
the world, but that doesn’t mean it doesn’t have its share of competition; all of which aims to
take away from McDonald’s market share. Tight cost competition and abundance in fast food
choices in densely populated regions highlight the level of competition facing McDonald’s.
McDonald’s largest competitors include the companies Burger King, Wendy’s, and Taco
Bell within the United States. Taco Bell has little presence outside the U.S.; however, both
Burger King and Wendy’s operate a number of chains in countries all over the world. The
second largest national burger place, Burger King, differs from McDonald’s uniform and
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consistency with production marketing with ad campaigns: Offering consumers to “have it your
way”, customization for consumers is highlighted for any of their burgers or sandwiches. The
third largest burger fast food chain, Wendy’s, also competes heavily with McDonald’s, at risk of
taking away customers from McDonald’s restaurants. All three companies have a global
presence, though Burger King and Wendy’s presence globally is overall much smaller than
McDonald’s outside the United States. McDonald’s takes the cake in marketing, having spent in
the U.S. alone $1.37 billion in marketing and advertising (Morrison, 2012). Being such a
globally expansive powerhouse, McDonald’s has ingrained itself as a culturally relevant world
citizen by being one of the most recognizable brands in the world.
McDonald’s Current Twitter Use
McDonald’s has a well-developed marketing plan for their Twitter account. The
company strategically updates, comments, and promotes throughout the day. The Twitter
account has several elements that are followed closely each day.
Early in the morning, McDonald’s will reply to anyone tweeting specifically at
@McDonald’s. Some tweets are positive reinforcement but others are true expression of certain
customer’s dissatisfaction with a recent experience. McDonald’s does a great job in replying
back to Twitter users that same day by providing compensation or reimbursement for both
positive and negative publicity.
The second part of the McDonald’s Twitter account strategy is product promotion. Two
recent product promotions that McDonald’s has run are the Cheddar Bacon Onion Cheeseburger
and the Peppermint Mocha McCafe coffee. McDonald’s will post pictures of these products,
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tweet about relevant related ideas, and give coupons to promote these products. The company
does a great job of varying how and the time of day for each update related to these products.
The third factor that McDonald’s employees are through interaction by asking its
followers to retweet promotions with a chance to win prizes. For example, “Retweet today’s
“Your Daily Bacon” image before 4pm CST & we’ll surprise 10 lucky people with #CBO
coupons!” McDonald’s will then tweet at the users and ask them to “DM”, which means direct
message, back at McDonald’s for a chance to be randomly selected. McDonald’s uses Radian6
which is a social media customer relationship management to randomly select winners.
McDonald’s has run this same type of campaign for Monopoly, donating to the Ronald
McDonald’s house and other product promotions.
The last objectives that McDonald’s complete daily include building a strong public
relationship by enhancing brand image and being a catalyst for conversation. McDonald’s has
multiple tweets about nutrition and through the use of Twitter, the company is constantly
promoting how they are reducing sodium and developing a healthier menu. Next, also on a
macro level, McDonald’s is tweeting about how they are replacing energy with renewable
energy. In response to the Super Storm Sandy, McDonald’s has recently tweeted about the
amount of money donated to the @RedCross to always be involved within the community.
Recommendations
McDonald’s Twitter account is still within its infant stage. There is much room to
improve but overall McDonald’s has a well-developed strategy. Ways in which McDonald’s can
improve their Twitter account is through cross – platform collaboration. There have only been a
few updates about the other sites that they use such as Facebook and Pinterest. Another way
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McDonald’s can improve upon their strategy is through the use of short media files. There have
only been a few tweets that include short videos and this is a great way to show followers more
than you can in a single still picture or the 140 characters you are limited to on Twitter.
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Works Cited
Hoover's Company Records - In-depth Records, 2012, McDonald's Corporation. Rep. N.p.: Hoover's,
2012. LexisNexis Company Dossier. Web. 27 Nov. 2012.
"McDonald's: Behind the Golden Arches." Scribd. Dishant Sidana, 2009. Web. 28 Nov. 2012.
<http://www.scribd.com/doc/11520753/Marketing-Strategies-of-McDonalds>.
Morrison, Maureen. "As McD's New President Works to Lift Sales, Will Marketing Come Under the
Microscope?" Update Your User Profile. Advertising Age, 26 Nov. 2012. Web. 30 Nov. 2012.
<http://www.adage.com/article/news/mcdonald-s-president-push-change-marketing/238455/>.
"Some Olympics Sponsors Enjoyed Lift In Brand Awareness, Esteem." Marketing Charts. Watershed
Publishing, 19 Oct. 2012. Web. 28 Nov. 2012.
<http://www.marketingcharts.com/wp/topics/branding/some-olympics-sponsors-enjoyed-lift-in-brandawareness-esteem-24181/>.