This week, Twitter shares enjoyed a small bounce amid speculation that the 10-year old social network might be on the verge of being sold. While rumors are swirling, some of the top contenders appear to be Salesforce, Microsoft (which bought LinkedIn for a record $26.2B earlier this summer), and Disney. While each of these internet giants has its own motivations for acquiring Twitter, Disney’s alleged bid is one of the most serious – and most interesting.
Twitter as Adtech?
As Bloomberg analyst Paul Sweeney notes, “A union with Twitter would give Disney much larger exposure to the ad dollars that are increasingly flowing to social media sites. Twitter may give them an opportunity to communicate directly with their customers in an increasingly fragmented media landscape.”
Twitter has built a reasonable ad business, competing for the same dollars as Google and Facebook in mobile app install advertising. The company has also expanded the infrastructure required to support an ad-driven business: Twitter has acquired analytics companies (including their $90 million purchase of BlueFin Labs), embedded their own feeds into many external sites, and have become an important communication platform for journalists, celebrities, and other influencers. But while Verto App Watch data shows that more than 210 million people (U.S. adults, ages 18+) are exposed to some form of Twitter traffic every month, Twitter’s own mobile apps only see about 30 million monthly users (and 10 million daily active users).
But Disney sees less than half of Twitter’s overall traffic, and its audience is far less engaged: according to Verto Analytics data (below), Twitter is a much stickier brand than Disney (stickiness is how Verto identifies the most engaging brands, sites, and apps, by comparing daily users to monthly users). Twitter’s 40% stickiness rating is more than double that of the Disney brand. This alone is a compelling reason for Disney to consider a Twitter buy.
Twitter as a Distribution Platform
Another interesting angle on a potential Disney-Twitter merger is based on the social media platform’s strength as a content network. “It’s a video distribution play,” said James Cakmak, an analyst at Monness Crespi Hardt & Co. “What Disney has to think about is what is its place in a post cord-cutting world. They are investing in technology for distribution — and this would give them the platform to reach audiences around the world.”
According to Verto Analytics’ latest data, the Twitter brand has a 49% reach in the U.S., averaging upwards of 200 million users per month; this is considerably higher than Disney’s 26% reach and approximately 100 million monthly users (this includes Disney’s digital properties, such as ESPN and Fusion). Now that audiences can sidestep content distributors and go straight to social media for primetime content (eg., Twitter started livestreaming NFL games this fall, and is also livestreaming all three presidential debates), a Twitter acquisition could not only provide ad revenue, it could revolutionize the way that Disney reaches and serves content to audiences on a global scale.
Twitter’s existing advertising platform, the engagement of its users, and the tools currently available for brands to address target audiences, are all an enticing package for Disney (and Twitter’s other supposed suitors). And while Jack Dorsey and Evan Williams might not have envisioned it this way when they founded the company, it’s easy to see how Twitter’s functionality as an advertising and content distribution platform could be leveraged by Disney to increase their own reach and engagement, especially with an increasingly mobile-centric audience.