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Twitter India's $10,000 minimum budget irks agencies, brands

12-August-2014
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Twitter India's $10,000 minimum budget irks agencies, brands

Twitter might be concentrating on increasing its user base in India and forging relations with broadcasters and content owners, but by asking Indian marketers to cough up a pre-set minimum budget before using any of its promotional tools is putting off many clients.

Agencies we spoke to said that Twitter asks marketers for a sum to the tune of $10,000 or around Rs 6 lakh as a minimum commitment for any campaign. The campaign can be run for three months, though agencies said that in many cases, this period could be negotiated and extended. By agreeing to spend at least this amount on the campaign, brands can then make use of Twitter’s promotional tools such as promoted tweets, promoted accounts and promoted trends.

This does not apply to the hashtag campaigns, contests, or other Twitter activities that brands carry out on Twitter. However, if a brand wants to use any of these three tools to boost its organic reach, then it will have to be ready to pay at least this minimum amount.

“The beauty of digital is that you can start small and then scale up. Here, they (Twitter) are asking you to work on a traditional media model,” argued Siddharth Hegde, MD and Founder, Ethinos Digital Marketing.

At a time when a promoted post on Facebook starts from as little as a few hundred rupees, it is no wonder that many brands are a bit wary of investing such a big amount and, that too, in a single quarter. Zafar Rais, CEO, Mindshift Interactive remarked, “Twitter is evolving gradually, but the entry point of Rs 6 lakh is too high, which makes brands sceptical. Facebook is a cheaper option. For agencies to see 100 per cent value in Twitter, there needs to be transparency. A lot of budgets are set on a quarterly basis and clients balk at investing so much money on one platform.”

Another reason for this scepticism, he added, is that brands have been used to doing a lot of generic stuff on Twitter such as hashtag campaigns and contests. These have, in most cases, served the brand well. To make use of Twitter’s promotional tools at such a high investment does not really fit in with the short-term campaigns that most brands run. It might probably be more suitable for those who want to continue a campaign over a period of a couple of quarters as it would help to spread out the costs.

The head of another digital agency acknowledged that the minimum budget was a barrier. “If the amount asked would have been rational, it would not have been a problem. If you see results, then you might still pay. Right now it is unchartered territory for brands,” he said.

Chetan Asher, Co-founder, Tonic Media, suggested that brands would probably have invested that much amount if left to themselves, but making it mandatory creates a mental block. When asked whether he had seen reluctance by his clients on investing in Twitter due to this, he said, “Clients mull over it and are slow in adopting it (Twitter advertising), though not completely ruling it out.”

Sanjay Mehta, Co-CEO, Social Wavelength agreed that Facebook is taking away the bulk of advertising money right now due to it having more options and the targeting being sharper. But he, too, said that despite the minimum budget, clients are willing to put in the money.

It would do well to remember here that until 2013, even US advertisers had a minimum budget requirement of $5,000 for a period of three months. However, this was done away with when self-service ads were made generally available to advertisers in the US. Perhaps, we might see something similar in India when the market matures a bit more. For example, Asher told us that after one has met the guaranteed amount for the first campaign, Twitter’s sales representatives tend to be bit more flexible about the minimum budget.

However, the challenges in India are very different. Digital marketing has just started picking up over the last couple of years. India has one of the largest numbers of small and medium industries who might have been keen to get on to Twitter to promote their brand but for this huge roadblock. Even among the large brands, an understanding about how effective social media can be for promotions and advertising is just dawning.

Another thing, say agencies, is that Twitter ads in India are ‘self-serve’, but not ‘self-buy’. Basically, to buy a Twitter ad, one has to go through its appointed representative, in the case of India, Komli Media.

According to Suveer Bajaj, Co-founder and Director (Operations), FoxyMoron, “The $10,000 commitment is kind of putting off. Twitter ads also cannot be bought directly from Twitter, but have to be bought through Komli (Komli Media). This year, the cost per follower has also gone up from Rs 30 to Rs 40-45, so it is still not a commercially viable option.”

Twitter’s India representatives had not replied to our emails or calls at the time of filing this report.

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