NEW YORK (TheStreet) - Disney (DIS) holds U.S. media rights to the World Cup and Budweiser (BUD), Coca-Cola (KO), McDonalds (MCD) and Visa (V) will all be major advertisers, but it will be Twitter (TWTR) that could shine above all other large U.S. companies in Brazil.
The World Cup provides Twitter an unparalleled venue to showcase its advertising platform and, consequently, the tournament could change how investors think about the company. Twitter seems to understand the importance of the World Cup to its first year as a public company, and it is aggressively rolling out tools to help users follow the action on the social network.
Behind the scenes, Twitter also is using the tournament in Brazil as a trial for advertisers who may not fully understand how to use the micro-blogging site. In Europe, Twitter recently hosted a series of daylong World Cup training runs with advertisers in what the company calls its Live Studio to get them prepared for the tournament.
Those training sessions were used to demonstrate the ways advertisers can use Twitter as a marketing platform for campaigns that target a real-time event. With footage from previous tournaments, Twitter said its Live Studio training sessions ran through specific test cases of on-field action where a marketing opportunity emerged.
"[T]he work that we're doing to touch marketers and agencies is less about why Twitter, and more about how Twitter," Adam Bain, Twitter's chief revenue officer, said of the company's Live Studio at a recent investor conference.
"It turns out you can actually plan for being live or plan for being in the moment," Bain added, while noting that a key aspect of Twitter's partnership with Starcom MediaVest Group includes such training sessions to help advertisers.
It will be interesting to see if and how advertisers find new ways of using Twitter this World Cup. One feature to watch is a recently launched Twitter Cards product, which bundles photos, videos and captions in a single tweet. Twitter Cards may give some advertisers the added messaging and context they want to go beyond a 140-character message, a link or a photo.
A Break from Commercial Breaks
While live events like the SuperBowl, the Oscars, and the Olympics are well known as key moments for Twitter, the World Cup has one subtle advantage: There are no commercial breaks during soccer matches.
If Neymar or Jozy Altidore score a winning goal, there is little in the moment that a TV advertiser can do. The next commercial only comes at halftime or after the final whistle has blown.
Twitter provides an obvious alternative, or even an additive platform, for those who might have spent millions on 30-second TV spots.
For most of Twitter's users and partners, this will also be their first World Cup on the micro-blogging site.
New World Cup Features
Twitter appears to be doing everything possible to train its users on how to follow the World Cup, and it has created a multitude of easy-to-use functions that could boost engagement during the tournament. It won't be surprising if World Cup diehards around the world are glued to both their TV sets and their Twitter accounts throughout the tournament.
Twitter's World Cup functionality includes country and player guides, in addition to hashtags for individual games and teams that will open easy channels of communication on timelines when the tournament begins. Games such as the opening match of the World Cup, Brazil's group stage match against Croatia on June 12, will have their own page on Twitter, giving users real-time scores, player Twitter handles and reactions.
All 32 teams that qualified for the World Cup have Twitter accounts, and over 300 players participating in the tournament are on the micro-blogging site. Twitter users will also be able to tailor their profiles depending on the country or players they support. It wouldn't be surprising if Twitter's World Cup features attract new users, something the company has said is a priority.
Twitter's world cup features may allow users to communicate in a more defined space, possibly boosting collaboration, Jeff Sica, of Sica Wealth Management, said in a Wednesday email.
Sica calls Twitter's World Cup tools "a great way to attract people to Twitter and make them the go-to destination for soccer fans over the next month."
These projects are also necessary for Twitter. After all, the company acknowledges it benefits significantly from large real-time events, whether it is a World Cup, an election or even a natural disaster.
The Investor Case
If the World Cup proves to be a success for Twitter, it will be because users, advertisers and investors leave the tournament with a greater understanding of how the platform stands out as a marketing channel. The bar will be extremely high.
In recent quarters, Facebook (FB) COO Sheryl Sandberg has done an underrated job explaining just why the billion-member social network is becoming the de facto platform for many advertisers, especially small businesses. As Facebook has rolled back the curtain on its analytic and targeting capabilities, investors have noticed. Few now question Facebook's mobile and desktop marketing platform, even if Facebook recently warned investors that its growth rates may slow.
Twitter, by contrast, is still a bit of a mystery for investors and analysts. Part of that is just timing. The company is earlier on its monetization efforts than Facebook. But Twitter also is a younger social network for most of its users, meaning user understanding of the platform and habits are still taking shape.
Events like the World Cup provide Twitter a new opportunity to prove its value.
"I expect this to be a seminal event for Twitter," Scott Kessler, the head of technology research at S&P Capital IQ, said in a Tuesday telephone interview.
Kessler noted that the World Cup may underscore the global nature of Twitter's audience and it could further demonstrate the reach that tweets have. It also comes at a turning point for Twitter in the eyes of many analysts and investors.
Twitter's shares have fallen sharply in recent earnings reports as a result of data that indicate growth of total timeline views is flat. However, it isn't clear whether timeline views accurately represent activity and engagement on Twitter. The company's fiscal first quarter also showed favorites and retweets rose about 25%. Such figures indicate user engagement may not have peaked at Twitter.
The presentation of strong World Cup data figures and an explanation of why users and advertisers turned to the site over competitors like Facebook, Yahoo (YHOO), AOL (AOL) and even Google (GOOG) could shore up investor confidence in Twitter.
"Typically Twitter does very well with big events that are global in nature and occur in real time," Kessler concluded. That comparative advantage underpins Twitter's efforts to expand to TV by way of Twitter TV and partnerships with media companies as large as Comcast (CMCSA) and Publicis. Twitter has TV ratings in eleven markets, including Brazil and Europe where World Cup interest may be highest.
Minimal Financial Impact
Don't expect this World Cup to drive blockbuster earnings. Kessler, the S&P Capital IQ analyst, noted that the World Cup may only have a minimal impact on Twitter's financial results given that the first quarter included the SuperBowl and the Olympics.
"And while there will be key events in Q2 like the World Cup, there will be fewer than in Q1," Twitter said on its most recent earnings call. The company expects second-quarter revenue to grow to between $270 million and $280 million this quarter, with adjusted EBITDA in the range of $25 million to $30 million.
Perhaps, the World Cup will prove a better opportunity than the SuperBowl and Olympics. It is also possible that the World Cup has flown under the radar for Twitter investors. If the tournament proves to be a seminal event for Twitter's users an advertisers, expect to hear much more about the tournament from the company.
Bottom Line: Twitter quietly has the most at stake this World Cup. Don't be surprised if it is the big winner in Brazil no matter who takes the trophy.
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-- Written by Antoine Gara in New York