Twitter's Purchase of Bluefin Labs: A Play to Make Social-TV Craze Into a Business

Turning Chatter About TV Into Ad Dollars For Twitter

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Can Twitter capitalize on the social-TV craze it helped ignite?

As the backchannel chatter showed during the Super Bowl Sunday night, Twitter and TV have become almost inseparable, and brands are buying in to participate in the conversation, much like Oreos, Tide, Audi, Volkswagen and others during the blackout at the Mercedes-Benz Superdome.

Business Insider is reporting that Twitter has agreed to what may be its biggest acquisition to date: four-year-old BlueFin Labs, in a deal expected to be announced on Tuesday.

The deal will give Twitter some research firepower to sell TV trends and conversation to brands. The Mass.-based firm started by two MIT researchers provides analysis to brands, agencies and media companies into how their TV shows and advertisements fare based on social-media conversations. For marketers, this means insights into how a TV ad is performing based on social-media reaction -- the equivalent of a real-time focus group -- and which shows to run them in. And for Bluefin's TV network clients, it means data to help them determine which shows to keep on the air and when to air them.

What sets BlueFin apart from other startups slicing and dicing Twitter's firehose is that it has encoded and fingerprinted a vast library of TV and uses semantic technology developed at MIT to match conversation in social media to content in shows and in ads. Twitter could conceivably, then, target ads to that content, rather than just to keywords, as well as provide very granular data on how the ads fared.

For Twitter, deal represents a commitment to scaling the revenue it's bringing in from the "second screen" phenomenon it's ignited. While Twitter likely profited enormously from promoted tweets and trends linked to major televised events like the Olympics and the Super Bowl, the company still hasn't figured out how to turn the more modest, though still robust, level of chatter that takes place on a nightly basis as users tune into "Revenge" or a regular-season Knicks game into a big revenue opportunity.

To do that , it will need to create compelling opportunities for brands based on that baseline evening chatter. Bluefin's expertise showing marketers how to make social data useful will be a good start. Both Twitter's head of TV Fred Graver and Bluefin Labs's CEO JP Maheu -- the former CEO of Publicis Modem who was brought in to run the business last year -- were speakers at Ad Age 's Social Engagement/Social TV conference last fall.

The BlueFin guys also make incredible data visualizations of social conversation, which will no doubt start showing up in Twitter sales decks. Twitter is on track to take in $545.2 million in ad revenue this year and $807.5 million in 2014, according to an eMarketer estimate.

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