Why Twitter Dropped Close to $90 Million on Bluefin Labs
Twitter just paid a lot of money for Bluefin Labs (around $90 million, we hear), a social analytics startup that marries two key streams of data to Twitter in its pitch to advertisers: What’s happening on TV, and what’s happening on Twitter.
That price alone lets us know how important Bluefin is to Twitter, a burgeoning media company. But Bluefin’s demo at our D: Dive Into Media conference on Tuesday gave better insight into exactly why Twitter was willing to spend that much on its largest acquisition to date.
“This whole thing is about taking common sense and making it scale and making it quantative,” Deb Roy, co-founder of Bluefin, said at the conference. “If you can take [our analytics service] and not just do it about [one event like] the Super Bowl but do it for all TV shows … now you have this comprehensive view into how TV is driving engagement.”
Example: Bluefin drills down into specific moments on television, be they advertisements, actual shows or what have you. And Roy says it can grab a larger, more representative slice of the Twitter users tweeting about a specific moment than, say, a hashtag can (as many people may be talking about an event without using a hashtag).
From there, Bluefin runs what’s called an affinity analysis, which lets the company figure out “preexisting affinities between TV program audiences and brands.” Moreover, Bluefin can flesh out a profile of a particular Twitter user tweeting in a specific moment, based on that person’s tweeting history.
That’s crucial, and now it can be part of Twitter’s way of marrying data to its ad-sales pitch, and can make a more compelling case to the brands to spend more on social advertising, directing brands to the best times and places to run said ads.
It’s the same thing TV pitchmen and women have been doing for years, only with loads more research, studies and time behind them. Twitter’s battle for ad dollars when competing with the tried and true hasn’t been easy, as it hasn’t exactly had a robust analytics service to back up the company’s claims of importance based on “word of mouth and social influence,” as Roy puts it.
So perhaps it was a crucial buy for Twitter in the quest to flesh out its advertising platform. But was it $90 million dollars crucial?
We’ll see when we finally get a chance to look at Twitter’s balance sheet. Perhaps in 2014.