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Fri 27 Mar 2015 02:37 AM

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For Twitter or for worse: Shailesh Rao

Twitter plans to open an office in Dubai, at the heart of its fastest-growing region. The social networking site’s regional boss, Shailesh Rao, explains why

For Twitter or for worse: Shailesh Rao

Arabs have been flocking to Twitter at break-neck speed in recent years, and now the microblogging website is making moves to bring more local brands into the nest.

The company is planning to open its first Middle East office in Dubai “within months”, with the sole purpose of coercing more businesses onto the platform, in turn increasing advertising revenues.

The statistics are alluring. While Twitter will not divulge the number of registered users in the region, it says the Middle East has the fastest-growing user base in the world and three quarters of existing users are active every day.

And it is not only youngsters or highly-opinionated people. According to Twitter, 15 percent of its Arab members are aged 45 or older, while about one quarter are aged 35-44, 33 percent are aged 25-34 and 29 percent are 16-24.

“We can reasonably say Twitter is a good approximation or realisation of how the region’s people are feeling and what they believe; it’s not skewed to one group or the other,” Shailesh Rao, vice president for Asia Pacific, Latin America and Emerging Markets, tells Arabian Business. 

With Twitter losing about $1.5m a day, Rao is hoping the site’s broad appeal in the Middle East will help it commercialise the strong presence.

A list of companies are already actively using Twitter to promote their brands, announce sales, launch new products and services or simply remind followers of its existence.

Some of the most successful in the Gulf include UAE telecommunications provider Etisalat, which has the largest Twitter following (593,000) of Middle Eastern firms, airlines such as Qatar Airways (508,000 followers) and Emirates (438,000), retailer Namshi (189,000) and Dubai Mall (286,000).

Their feeds are not only used as promotional tools but to handle complaints, discuss relevant issues, or simply to wish followers a good day.

Rao says promoted campaigns and tweets on the platform have an average engagement of 3-4 percent globally.

“Put that in context, the average click through rate for a generic display ad on the internet is 0.1 percent. That means that consistently around the world for many years, the average performance of a Twitter campaign is 30-40 times better than traditional display advertising campaigns on the web,” he says.

“So really the only reason any company should be compelled to make Twitter a core part of their marketing strategy throughout the year is because the platform works, and in fact it works a lot better than other traditional digital advertising alternatives.”

But it is not only about business. Many of the most successful brands on Twitter engage with their followers with daily — often even more regularly — tweets wishing them a nice day or posting photos of a new dish in a bid to entice them to their bricks and mortar venue.

Rao says as a live and interactive platform, Twitter allows brands to engage in conversation with their fans, building a greater rapport.

“What makes Twitter special is the opportunity for a brand to participate in a moment,” he says. “There’s a timeliness in the way a brand message comes out to an audience that drives incremental resonance and engagement.

“[For example], when a match is happening and you’re the sponsor of that match, talking to the audience watching the match at the moment has a resonance because of the timing of it. It’s really hard to compare to any other form of media.”

Yet while Twitter is competing against other forms of media, it also has been increasingly embedded in television, particularly during reality or live TV shows. There was a 200 percent increase in television conversations on Twitter in MENA last year, according to the networking site.

In a bid to even further prove its value, Twitter acquired social data provider Gnip a year ago. The start-up is now providing deeper analytics and customer insight to help businesses and governments make the most of their presence on Twitter.

The enormous growth of social media in the past decade has spawned an entire industry of independent analytics firms that can use the opinions and information revealed on the public sites to tip off traders about stock news, inform television producers about viewer sentiment or educate governments on citizens’ views.

With hordes of clients in finance, media and government willing to pay for insights from Twitter data, Gnip is therefore not only providing Twitter with its own wealth of insight to take to potential advertisers but is adding to its revenue base.

Twitter was valued at $31bn at the end of its first day of trading on the New York Stock Exchange on 7 November 2013. But it has been bleeding money ever since, recording a net loss of $578m for 2014.

The reason, the company says, is because it has been acquiring a collection of start-ups. Its purchase of the short-video sharing platform Vine for $970m in October, 2012 — before it was even launched — was one of the all-time largest social media acquisitions.

Its subsequent bills for the social TV service Bluefin (bought for a reported $67.3m) in February 2013, and coding company Crashlytics ($38.2m) were smaller but still significant sums.

Rao says those outlays have been obscuring Twitter’s financial potential.

“When we… see available technologies and companies, we evaluate them and ask ourselves, can that technology or that company make us better at doing what we already do?” he says. “A great example is Vine — when we acquired Vine it fit very nicely into the Twitter profile, it was a short-format video platform that allowed users to very quickly publish video expressions in the moment and to allow Twitter users to consume video content in a very unique way and it was a perfect platform for use on a mobile device because of its short video nature.”

Twitter will, eventually, make a profit, Rao insists.

“We certainly work towards that goal. I believe that we can be a viable, enduring business, principally because of two things: one, users get value out of the platform and increasingly, so they keep coming back to consume content and produce content,” he says.

“[Second], brands are getting value out of the platform, as well. You’re seeing better results using our advertising platform than traditional display advertising. As long as that’s true and we’re scaling, I think we’ll be fine and I think we can build a business that will endure; that’s certainly the operating assumption for the entire company and all the executives.”

That is encouraging news for Twitter’s investors, including Saudi billionaire Prince Alwaleed Bin Talal, who was one of the first to buy into the company. The value of his stake has quadrupled from an initial $300m to $1.2bn, according to a statement issued in September by the prince’s Kingdom Holding Company.

The businessman — who, incidentally, has more than 3 million Twitter followers and owns Arabic television network Rotana — met with Twitter co-founder Jack Dorsey in September last year and Rao says the prince has advised Twitter on its business strategies globally.

“In general, whether it’s Prince Alwaleed or other investors and board members, we’re regularly in touch to get advice on how to make the service the best that it can be in the region and the world,” Rao says.

Twitter relies almost exclusively on advertising for its revenue. While that obviously limits the company’s money-making capacity, some analysts argue there is huge scope to grow that source, particularly on mobile devices, where 80 percent of Twitter users access the site.

There is also a lot of untapped potential internationally. While 77 percent of Twitter’s active users are outside the US, the same can be said for only 35 percent of its revenues.

As head of the Middle East, a largely consumeristic market, Rao also is hoping the new Dubai office will draw more local brands into the Twitter conversation.

The networking site already is the top preferred social media channel for 12 percent of social media users in Saudi Arabia and 9 percent in the UAE, according to inaugural Arab Social Media Report released by the global market research company TNS in Dubai last month.

About one third of social media users in the Arab world have a Twitter account, with more than half in Saudi Arabia and the UAE.

Rao says the platform is popular because it is live, public, conversational and distributive.

“[Twitter] allows the region, which is across multiple countries — it’s vast geographically — to share a common language, to some extent share culture, to come together around common interests in a virtual way, whether you’re in Egypt, Saudi Arabia, UAE or Qatar,” Rao says. “That ability to bring an intimacy and bring people together around shared interests is unique to Twitter.

“Secondly, to express that and to be able to do it in a public environment so that your voice is heard is also quite unique. It’s not only a way for the person publishing content to express what they believe but it’s also a great way for people consuming content… [if] you want to know exactly how people feel and exactly what their point of view is about a particular event, whether it’s a TV show, a government activity or cultural experience. There’s no better way to get your finger on the pulse of how your fellow friends and colleagues in the region feel.

“I also think it’s an extremely authentic platform. There’s something about your Twitter account being your identity and your voice being expressed publicly, with a way for people to respond to you, that forces a certain level of authenticity and dialogue. I think people appreciate that as well.”

However, the public nature of Twitter also has seen scores of people in the Middle East arrested and jailed for comments posted on the site.

In January, former Kuwaiti MP Saleh Al Mulla was arrested for using Twitter to urge the government to stop “donating” billions of dollars to Egypt.

“Your Highness, we won’t accept billions more handed out to other countries. We have donated enough. This is the money of the people of Kuwait,” Al Mulla, who is on bail, wrote in Arabic in a tweet on 5 January.

At least five online activists also are on bail in Kuwait for posting comments deemed offensive to Saudi Arabia’s late King Abdullah following his death in January, according to newswire service AFP, while opposition activist Sara Al Darees was sentenced to 20 months in jail in 2013 for offending the Emir in a comment posted on Twitter.

In Saudi Arabia last year, a sports journalist was last year sentenced to three months’ jail and 50 lashes for defaming two soccer club presidents and two men were sentenced to ten years’ jail for messages they posted on Twitter that a Saudi court deemed undermined the country’s leadership, the state news agency SPA reported.

While Twitter purports that its platform gives a mouthpiece to free speech, Rao refuses to comment on the jail sentences. 

“It would call upon Twitter stepping beyond its authority and its role to tell governments what they should and should not do,” he says, after several versions of the question have been put to him.

“We live in a very diverse world in which every society and every government that represents that society sets its own rules of how a society should operate and it’s our job to provide a platform for users to express themselves within the context of those social and legal norms.

“What we try to do is engage with governments around the world and other stakeholders to make sure they’re fully utilising the platform for constructive and positive purposes.”

“My belief and my optimistic ode is that Twitter is a platform that can be used to bring governments and people closer together and in better alignment. Ultimately that happens because of mutual understanding and discourse so that a government, who understands what its citizenry want and believe, can be a more effective government representative of their population, and people better understand what their government’s point of view is.”

Meanwhile, the networking site is under constant pressure to weed out inappropriate tweets from nudity to defamation, as well as pinpoint users associated with terrorism or who are inciting violence. Militant groups including ISIL and Al Qaeda have actively used the site, and others, to spread their messages, claim responsibility for attacks and attract new members.

Rao says Twitter is working “aggressively” to identify incriminating content but the job is challenging and never-ending.

“Being a user-generated content platform, as are many other platforms like YouTube, it’s a challenge when 500 million tweets are made a day, so we rely upon the community of users to identify those users and that content which is in violation of the terms and conditions, so we can rapidly and expeditiously address the issue,” he says.

“We are very fortunate to have a deeply engaged user base who care a lot about the civility and the constructiveness of the dialogue on the platform. Luckily those users have worked very hard to help us find those offenders and we take those accounts down, we remove those users and that content. But it’s an ongoing activity, it’s an ongoing process, it’s not something we can do one time and move on; it’s requires vigilance and engagement.”

Rao, who was previously at Google for seven years, including as head of Google India, has spent most of his career taking digital platforms from the West to emerging markets around the world. Based in Singapore and covering a geographical area that represents more than half of the planet, he sees himself as a “voice for this market” at the Twitter headquarters.

“A lot of the time you’ll find tech companies, particularly that operate out of the West, don’t always have clear understanding or visibility of a lot of these large and unique and different markets and cultures,” he says.

“At Twitter we’re only as good as the local conversation on Twitter so it’s even more important for us as a company that we have that strong voice and presentation at the table.”

The opposite also is true. Rao says he expects the new Dubai office to help spread Twitter’s wings across the Arab world.

“I really do believe that by having a presence we’ll be able to accelerate our success in the region.”

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