While Twitter, Inc. (TWTR) faces a significant uproar in Turkey owing to Charlie Hebdo, the company’s expansion plans in international territories remain intact. Reportedly, the company is looking for a prospective buyout of an Indian company, ZipDial, for $30 million.
ZipDial, which offers mobile marketing and analytic services, is a startup founded in 2010. The company’s USP is its marketing model, which works on the concept of missed calls. The company offers a marketing campaign to its corporate clients in which consumers, the targeted audience, dial a number and hang up before connecting and getting charged, following which they get to receive promotional offers via texts.
ZipDial has launched successful marketing campaigns for the companies planning to expand in emerging markets. The company’s client base includes giants like IBM Corp. (IBM), Yum! Brands Inc's (YUM) KFC and Procter & Gamble Company's (PG) Gillette.
With the rise in social media agencies and increasing adoption of the Internet for marketing, companies are spending more on online advertisements and online marketing services. As a result, digital marketing has currently become one of the key emerging industries. Social media networks such as Facebook, LinkedIn, Google and Twitter are increasingly looking for a diverse platform to capitalize on the growing trend for online advertising and startup companies in the emerging markets offer solid growth potential.
According to reports, marketing leaders will spend more than $103 billion by 2019 on display advertising, social media marketing and email marketing. Over the next five years, spending on social media will grow faster than any other digital marketing channel. According to a Gartner Survey, digital marketing spending will increase 8% in 2015. Hence, media and technology companies are increasingly seeking both organic as well as inorganic growth to tap the revenue generating opportunities in digital marketing.
Following Adobe’s (ADBE) $600 million acquisition of French digital marketer, Neolane in 2013, companies like Cognizant, LinkedIn and Salesforce entered the digital marketing space in 2014 through strategic buyouts. Twitter’s latest acquisition plan signifies its intention to expand in India where digital marketing remains in the nascent stage.
This will not only help the company acquire a major interface between the consumer and business segments but also help promote its own user base. With digital marketing gaining popularity among advertisers, we expect more technology companies to grow in this space either through strategic acquisitions or organically.
Twitter, currently, has a Zacks Rank #3 (Hold).
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