Twitter focuses on video with Periscope purchase

Mayweather vs Pacquiao: ringside spectators used Periscope to stream videos of the fight to the web. Credit: PA Photos
Mayweather vs Pacquiao: ringside spectators used Periscope to stream videos of the fight to the web. Credit: PA Photos

The social network will reap the revenue benefits if it can integrate the streaming app successfully.

And the winner is… @PeriscopeCo!" That was the controversial Tweet by the Twitter chief executive, Dick Costolo, after an estimated 300 million people watched the Floyd Mayweather Jr vs Manny Pacquiao fight in Las Vegas earlier this month.

The Tweet caused a stir because Periscope, Twitter’s new smartphone app that allows users to stream video to the internet, was being used by some sitting ringside to film the boxing match in contravention of copyright.

Whether or not it was wise of Costolo to highlight the product’s piracy potential, it was clearly an opportunity to seize the moment. Twitter is betting big on Periscope after buying it in March for somewhere between $65 million and $100 million following the launch of its main competitor, Meerkat, in February.

Jason Goodman, the Albion founder, says the move shows Twitter is finally getting serious about unlocking its online revenue potential. For him, the key is to integrate Periscope within the main platform: "It has got to be another level within Twitter’s core business. It can’t be stand­alone but part of an armoury they can take to brands."

The mood is optimistic. For example, the US research company Jefferies says Periscope could help Twitter grab a significant chunk of the US online video ad business, which is expected to grow from $7 million in 2014 to $17 million by 2017.

And, in the UK, the latest Internet Advertising Bureau/PwC digital adspend report says mobile video adspend is the fastest-growing digital ad format, increasing at 196 per cent year on year to reach £64 million.

So where does the opportunity for streaming live video sit within a brand’s marketing strategy and what is the potential for online advertising?

Tim Denyer, the digital development director at OMD UK, thinks Periscope will present a low-cost option for marketers looking to promote the best bits of their business to audiences. He says: "For a fashion company, it could be access to the talent that design the clothes. For a football club, it could be access to the changing rooms.

"However, as ever with new technology, it is important not to get carried away with the technology but focus on what audiences actually want and need. Our recommendation to our clients is to ensure whatever they stream is culturally relevant."

For Neil Ramsden, the commercial director at Lowe Profero, the devil lies in the detail of how Twitter builds a funding model that makes sense for online advertisers: "Something like Google’s pay-per-click model would provide a long-term option for advertisers. Charging huge fees, like Snapchat tried to, is going to shut out a lot of the niche brands that may benefit most but only have a £30,000 budget to spend."

But the king of user-generated video is still YouTube, and it remains to be seen whether its owner, Google, will seek to break up this emerging Periscope/Meerkat duopoly.

As technology and internet speeds improve around the world, video offers great potential for both creative and revenue growth that could change the advertising landscape in ways not yet imagined. But will Periscope prove to be a knockout? Watch this space.


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