Advertisement as a Monetization Strategy - Case Study Example

Module Summary The need to use advertisement as a monetization strategy plunged the CEO of Twitter into serious issues. In the last 5 years, twitter has been involved in various commercial engagements in an attempt to increase its revenues through companies such as Paramount Pictures and Burberry among others. The partnerships did bring out positive financial outcomes. Analysis Twitter is undoubtedly a company that has consistently recorded improvements since its inception back in 2005. However, it has encountered several challenges that have worked to promote it. As seen in its history, the need to develop and come up with sophisticated products that meet the demand of the clients has been a major challenge owing to complications in technology. Operating under technological platforms, Twitter as an organization has had to exploit various technological niches that could improve the services it provides for its customers. It is obvious that technology keeps on changing and advancing such that what was the norm yesterday is consistently modified to suit the current market needs. The same way, Twitter has struggled to keep up with these changes that ensure relevance in the industry. Among the many units affected by this in the organization is the human resource. The pace at which Twitter is taking to integrate itself into the updated technological world is raising eyebrows. With its vast resources, it is expected that it would be fast transforming itself day by day into a more sophisticated social network platform. This is not really the case from the scrutiny of its developmental milestone. Although it can be argued that in just a decade Twitter has achieved more than many social rival networks, this is still below what it could have maximally achieved. There is a great deal that could have been done (or could still be done) if technology is fully embraced and exploited. Evidently, Twitter has struggled to even reach where it is today. This is shown by the company’s failure to record desirable financial results over the years despite some upgrades (Porter, 2008. p.133-135). The human resource has to either be retrained or constantly updated on the trending technological systems especially in an organization that solely depends on technological efficiencies to deliver to its customers. Sending messages via Twitter, the follow feature as well as tweet and retweet among others are all technology-dependent processes that have to be continuously upgraded in regards to their efficiency and practicality in order for the company to generate desirable results. As demonstrated, Twitter faced this challenge of transitional technology that probably required the company to hire a more knowledgeable technological team that would steer the organization forward. This means that the company has to utilize more resources to achieve these services. This is a factor that largely concerns business managers who aims at continually making profits (Aaker and Joachimsthaler, 2000. p.18-19). Consequently, the strategy that Twitter took in going about its challenges is questionable and it could probably be a factor that hinders its fast growth. Even after identifying various ways and spaces that would enable Twitter to generate higher revenues such as advertisement, the slow implementation of the strategy consistently dragged progress. Monetization was identified as a real boost to the company’s financial strength as it would benchmark all its operations based on desired financial gains. However, the period it took the company to respond and implement this strategy was quite extensive that huge profits were foregone. Evidentially, when it settled for monetization a myriad of financial gains were realized; a proof that if it had implemented this early enough then it would have made long strides by now in the social media industry. Recommendations As seen, the company faces implementation problems and the best way to solve it is for the management to seek consultancy services from professional consultants who would direct and guide the company on how to best implement the formulated strategies. It is evident that much time has already been lost in the implementation stage of policies and decisions. The management needs to realize that hiring these consultants would enable the organization to critically and informatively evaluate policies so as to smoothen the implementation process towards profit maximization (Kotler, Philip and Kevin, 2012. p. 119). Companies with long-term goals to succeed seek for the services of experts who are able to evaluate all the dimensions of the decisions made. They either approve or find better strategies of achieving the aspired results. Such strategies need to take into consideration the current position of the company so as not to embrace more than can possibly be handled without risking the company’s stability. For example, Twitter’s monetization program has been approached in a less strategic manner such that full implementation of the scheme has failed for a long time. This is probably owing to the likely risks the management may have overlooked. This has denied the company a chance to engage in lucrative deals thereby losing on critical opportunities (Porter, 2008. p.119). It is clear that technology is a major challenge that Twitter faces and several things can be done to improve the situation and lead the company towards the. It is recommended that the human resource management selects and hires well-suited individuals, who can steer the organization into embracing the latest technological methods (Porter, 2008. p.110). The backbone of an organization of this nature is its human resource pool. Having professional workers who are well informed on the nature of the technological requirements that the organizations has will undeniably improve its performance. Technology is the air that this firm breathes and having constant flow of quality technological works is core to the business success in the highly competitive social media industry. The company requires a highly skilled workforce knowledgeable in matters pertaining to the current technological trends so as to drive the business into profitability and subsequently, sustainability. This can be done through employees’ personal development programs such as retraining in organized seminars and conventions as well as study scholarships. The baseline of technological advancement of a business is to empower its employees to adapt quickly to emerging changes in technology (Kotler, Philip and Kevin, 2012. p.167). Resorting to advertisement can lead to the company’s steady growth owing to the corresponding increased demand from the expanding customer base. The company touches on a wide market owing to the nature of its operations and products. Being a social networking site, many people can access the advertisements posted in their twitter accounts or connected accounts. Just like other social network sites that currently rake in huge revenues and grew extensively over the last two decades, Twitter can as well generate high revenues and success. This can be largely generated from the many adverts run in the site. With the social prestige associated with Twitter, corporate bodies would organize and transact multi-million businesses via their online communication platform and this can directly promote the development of the company. Among the many reasons why the blogs and the social networking sites exist include taking advantage of the need for human interaction leading to them making profits (Kotler, Philip and Kevin, 2012. p. 142). These profits can be generated when adverts are run on behalf of businesses. In the current world, very few people pay attention to the billboards and posters on the streets and the latter two have lost their appeal. The wave of affluence has shifted people to the digitized methods of operations and technology has become part and parcel of the society in many more ways than it was two decades ago. Several hours are spent on the internet and the best way to get the attention of a target group is to find them online and twitter has a perfect opportunity to attract a big percentage of such people. A major change in the Twitter management should be made to awaken the sleeping giant so that the dormant units and departments in the company can start functioning competitively as some of the problems are purely as a result of management deficiencies. A critical examination of the company reveals that some departments are underperforming. For example, the marketing department should be vibrant enough to explore and utilize market gaps that exist and which can help bring economic fortunes to the company. Businesses do well when key departments such as the marketing and production among others are well-coordinated in their functions. According to Porter (p.126-127), the key to business success is having a well coordinated management teach across all levels. A team of management that can inspire and motivate the rest of the employees into delivering desired performance goals and this is what effective leadership is all about. Various changes should be made by replacing or motivating those employees who are recording low performance in their scoreboards so that a balanced management team that is goal oriented can be achieved. Implications The move by Twitter to seek for consultancy services will enable it gain a more multi-perspective and highly professional approach in implementing the decisions and proposals that the management has deemed fit for the company. Time is a precious commodity in any business and any wrong turn in decision making and implementation can easily lead to losses. Engaging consultants will result into positive changes as less time will be wasted in deliberating whether the decision is worth exploring. The move will ensure that efficiency is achieved as these formulated programs when implemented will positively impact on the business’ profitability. For example, the earlier the company starts to major on advertisement as its source of revenue, the quicker it will start gaining increased revenues. This will boost the company financially and enable it provide more quality services to its customers and at the same time gain considerable competitive advantage over its rivals (Aaker and Joachimsthaler, 2000. p. 8-10). Consequently, Twitter as company that bases its operations on technology, staff should be comprised of highly passionate people who are constantly keeping up with the changing technology. This will ensure that Twitter uses the best advanced methods that can foster business growth. As evidenced, the well-motivated staff will engineer all the best programs that can work to the advantage of the organization. It will also improve their innovation and invention capabilities. The positive financial impact gained from engaging in advertisements will enable Twitter be at the best position to exploit this opportunity. The company will manage to remunerate its employees with comparatively attractive packages as well as reinvest some profits into research and development initiatives (Trout, 35). High profit margins that would come as a result of advertisement definitely will enhance the implementation of any other program that is oriented towards meeting the long-term objectives of the business. Finally, a reshuffle of the Twitter management in areas that have recorded poor performance would ensure that the company is active and aware of its competitive disadvantage and initiate ways of gaining the lost glory. A positive and healthy working environment where everyone is sloped toward effective outcome and high performance would be created. The company will also be able to attract and retain the best talent in the information technology sector. All these would not only boost Twitter into becoming a far popular social site that it is today but also a business that records considerably high profits and increased revenue (Trout, 2010. p. 36-37). Work Cited Aaker, D. & Joachimsthaler, E. (2000). The Brand Relationship Spectrum: The Key to the Brand Architecture Challenge. California Management Review, 42(4), pp.8-23. Print. Kotler, Philip, & Kevin L. Keller. Marketing Management. Upper Saddle River, N.J: Prentice Hall, 2012. Print. Porter, Michael E. On Competition. Boston, MA: Harvard Business School, 2008. Trout, J. (2010). Marketing: Too important to be left to the marketing people. Leader to Leader, 2010(57), pp. 34-37. Print. Read More