Mike Isaac

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At D11, Twitter CEO Dick Costolo Talks TV, Ads and the Beauty of a Simple Product

Dick Costolo is having a busy year.

Twitter, the seven-year-old microblogging company, has scaled up to house nearly 2000 employees in its new San Francisco digs, and hosts more than 200 million monthly active users sending hundreds of millions of tweets per day. By many measures, it’s doing quite well.

But as we’ll get into in conversation with Costolo at our D: All Things Digital conference on Wednesday morning, Twitter definitely isn’t out of the woods quite yet. As the company continues to try and scale to Facebook-like heights, Twitter still faces the challenge of how to improve upon a product which at its core has remained largely unchanged for years, and how to make the app better at helping discover tweets they actually want to see.

Not to mention the uphill battle of convincing advertisers and big media brands that yes, Twitter ad spend is just as important to your marketing budget as traditional TV and print campaigns.

Most of all, Costolo needs to explain — simply — just what Twitter is to the billions of non-techies who may be willing to write the service off as just another way to tell the world what you had for breakfast.

Costolo will take the stage at about 10:30 am PT, and we’ll be covering it live.

10:14 am: Howdy! Right now we’re listening to Sting as everyone files back into the auditorium. It’ll be a Dick vs. Kara one on one coming up shortly.

10:17 am: And would you look at that — Twitter just pushed an update to its iPhone app live in the App Store, just minutes before Costolo hits the stage.

Guess they’ll have at least one to talk about.

10:21 am: And Kara takes the stage.

10:22 am: Here’s Dick! Apparently our makeup artist put gel on his eyebrows. “I feel naughty,” he says.

10:23 am: Kara starting off strong: “When is your IPO?”

Dick: “I’ll use a sports metaphor — I feel like I’m this wide receiver running down the sidelines.” Trying to manage all these things, like passing, etc. And someone on the sidelines asks what he’s doing after the game.

“Those aren’t things I spend a lot of time thinking about.”

10:24 am: Kara: Most people think you’re going to have an IPO. What’s the next stage for Twitter?

Dick: Very much about Twitter and TV stuff we’ve announced recently. Live instant replays from sports. We had a bunch of big announcements last week around that, called “Twitter Amplify.”

He’s big on the Bluefin acquisition from last year, too.

10:25 am: Kara: Let’s talk about TV. You’ve been big on this, Facebook hasn’t. Why go this direction?

Dick: “We’ve recognized that Twitter is the second screen for TV, and TV is more fun with Twitter. There are a bunch of ways that we can be complementary to broadcasters.”

Traditionally, many in our area have viewed broadcasters as competitors — we think of it as complementary.

10:27 am: What Dick isn’t mentioning — ad dollars! Shifting big brands into spending big bucks on Twitter’s promoted suite, not just sinking all of their cash on TV and print.

10:27 am: Dick: The public, real-time conversation of Twitter amplifies everything that’s happening on a TV program.

More football metaphors!

“When you can hear from other players in the league, others participating in it … that’s fun. It’s like you’re sitting next to the sportscaster in the broadcast booth.”

10:28 am: Kara: How do you feel that you’ve done on the software? I’m not really feeling great on it. The Instagram situation upset me.

Dick: Well, Instagram decided to pull its integration with Twitter. So that’s them.

10:29 am: Dick: When we think about developing for mobile — we’re all about speed of innovation.

“I think it’s important as the leader to help the team to understand when you want them to take more chances, more risks, more experminents. Not even going through legal or comms,” Costolo said.

No comms? No legal? That’s fun fodder for reporters like me!

10:31 am: Dick: We’ve got almost 1000 engineers working on all of this stuff.

The discover tab on Android — the engagement there is going up and up and up. I think the new profiles work we’re doing is fantastic.

10:31 am: Kara: Tell me how you’re doing with developer relationships?

You’ll remember, dear readers, that Twitter isn’t on the most popular list with many of the small-time third-party client developers who have created apps that mimic Twitter’s core capabilities.

10:32 am: Dick: “I think we’ve been very clear. We want to be the place where people go for the home timeline experience.”

But Twitter is still cool with data players like Gnip, DataSift and others using the company’s API to do data analysis.

(If you’re interested in that nerdy stuff, check out the Certified Products Program.)

10:34 am: Kara: Talk about the ads business.

Dick: Doing great! Not telling you about revenue, though.

Look at Bonobos, the clothing company. Or Oreos, Cadbury. Big brand lift. More purchases.

The beauty of promoted tweets is that they go out as content, and they can be promoted to people who don’t follow them.

10:35 am: Dick: “Last year, I told this group of marketers — think of the conversation as the canvas.”

So in other words, be like Oreo during the super bowl — get wacky on the fly and make an ad that plays on what’s happening at that moment. The kids will love it.

10:36 am: Dick: I think that the benefit of the returns that we’re delivering for advertisers … show that it’s a great place to achieve ROI on your marketing spend.

10:37 am: Kara: Are you guys cool with Google right now?

Dick: The landscape on our relationships always ebbs and flows. We obviously compete on ad spend, but there are other areas in which we can cooperate.

Where are areas we can work together more, and use those to leverage a relationship over the broader organization?

10:38 am: Kara: And Facebook? How could you two cooperate?

Dick: We talk with them all the time.

Kara: About?

Dick: All sorts of things.

He doesn’t talks specifics, obvs.

10:38 am: Kara: Tell me about Apple.

Dick: We kind of think of Apple as a sort of mentor company to us. We like the way they think about simplicity of design.

I’m constantly looking to the design team and asking, “What are things we can remove from the product? How can we make it more simple?”

The challenge there is to not lose and bury other features when you do so.

10:40 am: Kara: Do you wear Google Glass?

Dick: Nope. I don’t wear google Glass. I wear these glasses (his own).

But it’s cool, though. Here’s what they’ve achieved — they’re pushing the envelope.

But in some context to Google, it doesn’t matter if they achieve success in this iteration. Pushing the boundaries is more important.

10:41 am: Kara: So in a wearable universe, what does Twitter do?

Dick: Let’s go back to the “global town square” idea.

Information is distributed in a different way in this method. The participants are broadcasting the news. It’s multidirectional. It’s raw.

So the benefits of wearable computing can only enhance that — you won’t have to take out your phone. More like that.

10:42 am: Kara: What body parts are people going to tweet from the most?

Dick: Probably not their toe.

10:43 am: Kara: Let’s talk about the Boston Marathon and events like this. Do you have a responsibility here? Are you the new news org?

10:43 am: Dick: About Boston — when events like these happen — in the moment, the horror is very personal. I turned to Twitter to see if friends (like Foursquare CEO Dennis Crowley) are safe.

10:44 am: Dick: But it’s always been the case that folks are trying to sift through what’s out there and verify what’s true.

The beauty of Twitter today is that when those sorts of rumors surface, the crowd is doing a very good job of sorting out what’s real and what’s rumor very quickly.

10:45 am: Dick: We think of ourselves as very complementary to news orgs.

We’re the platform for global information distribution for the people, by the people.

The news orgs are the curators, the editors, the analysts. They do that important work.

10:46 am: Kara: Will you become more of a news org?

Dick: No, I see us partnering more with news orgs to distribute this real-time feed of info, probably working with companies that can help organize that information and dole it out to news org readers.

10:47 am: Dick: The beauty of the feed is that you’ve curated all these accounts you want to follow.

The work that the discovery team does … we’re almost remarkable in the signal it delivers. I’ll get the right sports, technology stories that I want to see. The engagement numbers are going up and up and up from an initial launch that I think was very rough.

10:48 am: Dick: I see a surfacing and discovery of things you didn’t know you wanted to know.

10:48 am: Kara: How are you doing as CEO? What’s your relationship with Jack Dorsey?

Dick: Jack is chairman. He’s got an almost remarkable product sensibility — in a way I’ve almost seen no one else do before.

Take the Vine deal. Jack found the team, said to me, “You have to meet these guys before they go back to New York.”

His ability to spot things like this in product is amazing.

10:49 am: Kara: What’s Twitter msising today?

Dick: Simplicity.

Because of the 140 character constraint, users have created this remarkable language for communication.

At the same time, that remarkable language is super hard to understand for newcomers.

Bridging that gap between awareness of what Twitter is and how to use — I continue to urge our teams to take risks there.

10:51 am: Question from the audience: Can you share user behavior thoughts?

Dick: Again, we want to make the public, real-time, widely distributed ability much better. It’s where we’re spending almost all of our time.

So for example, we haven’t invested as much in private group chat. And that wouldn’t be an area in which we’d feel threatened.

So look at Japan, where Line — the private chatting app — we don’t think of them as competitive.

In other words: Twitter is still big in Japan.

10:53 am: Another question: The info we decide to share socially — we can post to Twitter, to whatever. Should people have the option to share wherever we want?

Dick: I think that content posted to Twitter is distributed to more platforms, services, sites, online and offline than any other services out there. Would love to see if someone can prove to me otherwise.

Folks love Twitter’s API! Partners galore!

“We’re way out ahead on that front.”

10:55 am: Dick: There are many different ways to be successful — one way is to think of it as intellectual property. That’s fine.

But I don’t think of the way we run Twitter as pro or against anyone else.

10:56 am: Audience question: Thoughts on better authentication re: hack stuff?

Dick: We take that super seriously. We help other orgs that are considered authorities to make sure best practices are known.

Of course, two-factor authentication, which we just launched, is going to help that.

We’re investing quite a bit of money in security.

It would be fair to say we haven’t moved as quickly there as we have wanted to, and we’re working on that.

10:57 am: Q from the audience: When does the government start calling you, telling you you need to control how much affect you have on financial markets?

Dick: The challenge is that media laws are so wildly different around the world. You have places like the U.K. where you’ve got things like a Super Injunction.

Lots of legalese. Tough stuff.

The laws related to communication and broadcast are conceived of in a way that doesn’t really work in the world we live in today.

10:59 am: Kara: Yeah, but what’s Twitter’s role in something like this AP hack?

Dick: We’ve absolutely got a responsibility when these orgs who are considered an authority need assistance.

11:00 am: Dick: Something to remember — these things (hacks) have always happened. Frequently, it’s happened on private back channels.

Twitter is anything but private.

11:01 am: The end! Hope you enjoyed the colorful commentary. Keep checking the site for video highlights from the session.

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