The ‘Mutual Respect’ That Results When Consumers and Brands Collide

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Twitter vice president Shailesh Rao discusses the company's mobile-first strategy.

Shailesh Rao, vice president of Asia Pacific, the Americas and emerging markets for Twitter, sees himself as an educator and an evangelist. He did not know how much he would fit into this role until he arrived in India in 2007 as Google’s head for that country and discovered lack of understanding about the Internet. According to eMarketer, India is set to become Twitter’s largest market after the U.S. with a projected 40 million users by 2018, up from 17 million this year.

Twitter, says Rao, is powerful. It is a platform that enables a specific kind of communication and exchange, which is real time, public and conversational. Everybody on the planet is able to get value and use Twitter, he adds. “It is almost like we are tapping into the collective consciousness of humankind and able to see it reflected back to us.”

Knowledge@Wharton spoke with Rao about Twitter, social media trends and his leadership journey during the Wharton India Economic Forum in Philadelphia in February.

An edited transcript of the conversation follows.

Knowledge@Wharton: Lots of people woke up to the power and potential of Twitter during the Arab Spring, which some people call the Twitter Revolution in view of the political changes that it brought about. In your experience, what has been the most dramatic demonstration of Twitter’s power?

Shailesh Rao: That is a difficult question to answer because, having the privilege of being inside Twitter, we see examples of the usage of the platform that are so diverse. They are from all parts of the world — and even outside the Earth because we have seen astronauts tweet from space and the Mars Rover tweet from Mars. I would go back to a story that for me, in my early days at Twitter, was the most powerful.

I had traveled to Rio de Janeiro in the process of helping the company establish its presence in Brazil and I was interviewing Brazilians who were power users of Twitter. I met one young man who lived in a favela. A favela is the Brazilian name for slum. This boy told me the story of using Twitter. At that time I think he was 14 or 15. He was 12 when he used Twitter for the first time to communicate with the outside world [about] the military exercises that were being conducted in the favelas and what he was seeing.

Unfortunately, at times some of the people in the favelas faced poor physical treatment in the process of trying to use the military to clean them up from drug trafficking. And this young boy — using the power of Twitter — became the voice of all worldwide media news services as to what was actually happening inside the favelas. His voice became so prominent that the government had to pull back and rethink the program to come up with an approach that was more considerate of the community and its members. And he was only 12.

I met this man close to his favela — his home. Having him tell the story about how someone so young — living in poor circumstances — could have such a powerful voice was an amazing reminder of what Twitter is all about. It is the democratization of access to a platform that allows anyone in the world — who has a mobile phone and access to SMS — to have a voice and be heard. The young man went on to become the flag bearer for Brazil at the Summer Olympics two years ago. He is now something of a TV celebrity. It was wonderful to see his own personal journey in building his confidence and lifting himself and his family out of poverty.

“Twitter is about the democratization of access to a platform that allows anyone in the world — who has a mobile phone and access to SMS — to have a voice and be heard.”–Shailesh Rao

Knowledge@Wharton: In many ways Twitter is a force for good. A dramatic example came after the Sydney terrorist attacks when the “I’ll ride with you” movement was born in response over Twitter. But sometimes the opposite also happens where the crowd seems to turn against some poor victim through public shaming or harassment. There was a story in The New York Times Magazine recently about that. What is Twitter’s policy about such incidents? When does Twitter intervene?

Rao: As with any technology service, we have terms and conditions that govern what is appropriate use of the platform by our users. When people incite violence, indulge in hate speech, impersonate … these are all violations of our terms of service. When the community on Twitter submits complaints, we take appropriate action. Twitter is not an environment that is completely without rules. As with any platform or any tool, you will always have misuse. If you believe as I do that more people are good than bad, the majority of users of the platform are really inspiring, uplifting and ultimately productive for society.

Knowledge@Wharton: Can you give an example of a time when you had to intervene?

Rao: Well, it is hard to give a specific example, but I can tell you that we get requests all the time from our users saying [a particular account] is an impersonator, that it is not in fact the individual that they claim to be. In those instances, we have removed the user or the account from the platform.

Knowledge@Wharton: How many users does Twitter have now and in which parts of the world is it growing the fastest?

Rao: That is a bit of a complicated question because, if we look at today’s Twitter, we have more than 288 million monthly active users. We also have more than 500 million monthly visitors to the Twitter website; they may not be logged in, but they are using the service. They may have done a search on Google, seen something on television, and they come to Twitter to explore that content further. Then we have one billion unique mobile devices that we touch with our MoPub exchange service. MoPub is the largest mobile ad exchange in the world. It touches one billion unique mobile devices. So the number depends on which perspective you have on Twitter.

Knowledge@Wharton: Especially in the emerging markets, people access Twitter primarily through mobile phones. How has the Twitter app been optimized for mobile use?

Rao: Well, just to correct you, we are not only in emerging markets. We are a mobile service. We were designed from inception with SMS as the context. That is why we have 140 characters as the constraint for the Twitter message. Today, more than 80% of our users access the service over mobile. More than 80% of our revenues come from mobile advertising. So we are a mobile service, not just in emerging markets, but all around the world.

Knowledge@Wharton: Since you referred to people watching television while tweeting, there is some interesting research at Wharton where we refer to the fact that Twitter is often used as a second screen when people watch television. Do you see any advertising potential here? The research we published recently said that second screening can distract people from actually clicking through to buy something in some cases.

Rao: We have done research in-house that shows the opposite. We outfitted an audience with sensors and tracked their emotional state — their perspiration, their heart rate — to measure the level of engagement. One group was given their mobile device with access to Twitter. Another group — a control group — was allowed to watch the same sporting event but was not allowed to have access to their Twitter service during the match.

What we found was that the audience that was watching television and was using Twitter to have a conversation about the program were significantly more engaged. On the face of it, it seems that people may be distracted because they are looking at their phones. But people are much more emotionally and intellectually engaged with what is happening on the television screen because they are talking about it. They are trying to formulate opinions, react and respond to opinions.

Twitter is essentially a platform that enables a specific kind of communication and exchange, which is real time, public, and conversational. So it is natural that Twitter becomes a companion to television. This extends beyond television to any phenomenon in life.

We see a significant commercial opportunity in this. We have a feature called TV targeting, which allows advertisers to target audiences that are talking about a particular television show and then introduce the brand into the conversation. A logical example would be if you are a company that is advertising on television during a certain program, you may also want to extend your advertising to Twitter to the audiences that are talking about that program and presumably watching that program. Now your advertising is able to cover audiences across television and Twitter in an integrated cross-media fashion.

Knowledge@Wharton: That leads to a question I was about to ask about your advertising. Twitter’s fourth-quarter [2014] revenues grew 97% to $479 million, which is much higher than analysts had predicted. How was this achieved? Can you give examples of companies that are using Twitter to build their brands?

Rao: There are so many examples from around the world. But the fundamental reason that we are seeing this kind of success is because the product works. The average advertising campaign on Twitter is seeing a 3% to 5% engagement rate. That means that of the people who see an advertisement on Twitter, 3% to 5% are engaging with that ad in some way, To put that in context, the engagement rate is 30 to 50 times better than [it is in] traditional digital advertising.

“Users want relevant content as advertising. As a result, the distinction between advertising and content is going away. All that matters to a user is relevancy.”–Shailesh Rao

We are seeing that kind of success because our advertising approach mirrors where we are today as a society. Users want relevant content as advertising. As a result, the distinction between advertising and content is going away. All that really matters to a user — whether it comes from an advertiser or from another source — is relevancy. We have algorithms that are able to look at who you follow and those accounts on Twitter that you find the most valuable. We use that to make sure that the advertisements you see are the most relevant to you.

Secondly, the service allows for what I would call mutual respect. Traditional media has been broadcast, which implies one way. One of the defining characteristics of Twitter is that it allows for conversation. This ability to have a two-way dialogue has two interesting effects. The most obvious one is it allows the audience to respond. But the more subtle one, which I think is more powerful, is it forces accountability on the part of the brand, which means it is more authentic and genuine.

As a brand, if you are going to talk to an audience that you know can respond, the likelihood that what you say is true and authentic is much higher. This is why our advertising approach is working. That, of course, leads directly to revenue success.

There are so many examples of companies that have done amazing work on the platform. During the World Cup last year, Coca-Cola created what we would call a live studio “war room” to make sure that as the matches were unfolding, their conversation on Twitter could incorporate real-time information so that the conversation Coca-Cola was having with this audience could be relevant and timely.

Knowledge@Wharton: How would you compare Twitter’s advertising approach to that of other social media platforms, say, like Facebook?

Rao: It is hard to compare. I do not know how Facebook is thinking or what their strategy is. But I can say that any kind of advertising is not just relevant to the advertiser, but also relevant to the user. In that sense, we view advertising as content.

Another distinguishing feature of Twitter’s advertising is that you see the promotions in the timeline. By putting it in the core timeline, we take on the responsibility with the advertiser to make sure it is as relevant, if not more so, than the rest of information in your timeline on Twitter.

The third point is we are mobile. More than 80% of our revenue comes from people viewing ads on mobile devices. Inside Twitter, we talk and think mobile first. Twitter 

The last one is that for a long time there has been a narrative that has been developed that digital is fighting traditional media, that digital’s gains are traditional media’s losses. Twitter bucks that narrative. We see ourselves as an amplifier. We amplify traditional media; thereby we believe that we make traditional media better and we are a natural partner for traditional media.

Knowledge@Wharton: When you think of traditional media and social media, what in your mind is the most important metric to focus on?

Rao: Well, different metrics are important for different situations and different companies have different KPIs (key performance indicators). But if I had to boil it down to one thing, I would say engagement rate. If you know your audience is engaged with what you are publishing and what you are saying, everything will take care of itself. Everything else is downstream from that.

Knowledge@Wharton: Evan Williams (former Twitter CEO) recently remarked that Wall Street does not get Twitter. Do you agree? What do you wish Wall Street understood about Twitter?

Rao: When you are working in a company that is offering a new technology service to a new market or a new population of users, your job first and foremost is education. All of us inside the company see ourselves as evangelists or educators to help the world understand how to get the most value out of Twitter.

As long as we do that and we stay focused on the goals that we have, we will be fine. Whatever may be happening, you know, is noise in the outside world. We remain committed to a strategy we put in place a long time ago and we are just executing it as our strategy, and we are very excited about the progress that we are making.

Knowledge@Wharton: Mark Cuban recently described Twitter as the best search engine, bar none, to get real-time information. In view of your previous role at Google, I wonder if you agree with him. What makes Twitter different — for someone looking for information — from Google?

Rao: Both are great companies. I have a lot of respect for Google and what they did. Google did a great job indexing the web. But Twitter indexes the web directly down to the individuals who are publishing that content. Because of the format being 140 characters, we have an ability to capture real-time information. So, both provide valuable services. But everybody on the planet is able to get value and use Twitter. When that happens, think about what the net result is. In essence, we would be able to have a view into the pulse of the planet and the moods and the thoughts and the feelings — the aspirations and the anxieties — of human beings around the world. It is almost like we are tapping into the collective consciousness of humankind and able to see it reflected back at us.

“More than 80% of our revenue comes from people viewing ads on mobile devices. Inside Twitter, we talk and think mobile first.”–Shailesh Rao

We have examples of pharmaceutical companies that have told us they were able to discover a side effect of a drug that no clinical trial was able to reveal. [The company said,] “We learned that one of our drugs was causing headaches and we were able to do it because we analyzed the conversation on Twitter about our drug, and we saw that people were citing this repeatedly. We were able to improve our drug and eliminate that side effect.” It gives you just one small example of how different companies and organizations can leverage this insight into the collective consciousness of the world to make things better for people.

Knowledge@Wharton: I have a couple of final questions about your personal leadership journey. If you were to think back on your career, what would you say is the biggest leadership challenge you ever faced, how did you overcome it and what did you learn from it?

Rao: I am too young to be thinking about writing memoirs. So I do not have a ready rank ordered list for you.

Knowledge@Wharton: Pick any one.

Rao: Two examples come to mind. I will talk about a couple because they are different and perhaps they are relevant to different people. When I arrived in India to run Google in 2007, I was not aware how much a lack of understanding there was about how the Internet functioned and its role in that society, that culture. For the first year, while I was there to build a business, I realized that my job very quickly became a sort of ambassador for Google in India. So the amount of time I spent with government officials, with law enforcement officials, with educators and with leaders in civil society to play this kind of role was surprising. It highlighted for me the important role of being an educator and providing a translation function between the people who sit in Silicon Valley, who think that you just build products and people automatically use them, and corners of the world and society where there is friction in these information asymmetries.

A second kind of evolution in my career was moving from providing leadership when you have direct access to the people you lead — an immediate team that may be in your office or within close reach — to a different kind of leadership that is distributed or remote. How do you impose an agenda or enforce a set of parameters on teams that may be thousands of miles away from you, operating in offices that you may only get to visit once or twice a year?

That was a long learning process when I moved from running India to running Asia Pacific for Google and now at Twitter. It is running a broad swath of international markets — from Brazil to Russia to Australia and everything in between. It takes a tremendous amount of clarity on what is important, repeated communication of that prioritized list of objectives, and the use of remote communication tools to stay engaged with people. You have to create structures that ensure that the relevant voices and pockets of the organization have access so you do not end up in a bubble and an echo chamber of people just telling you what you want to hear.

Knowledge@Wharton: What role do yoga and meditation play in your life?

Rao: They play a significant role. I am a big believer that you can only grow as a professional, as a human being, and as a leader if you make yourself available to moments of serendipity — sort of tangential or non-linear thoughts, ideas and views. So reading good fiction, meeting interesting people for coffee, traveling and pursuing your hobbies can all help you in unintended ways.

Before I moved to India, I read Team of Rivals by Doris Kearns Goodwin. Now it is famous because Barack Obama has adopted it as his informal textbook. But I adopted it in 2007 when I was traveling to India. I was reading it because one of my degrees is in history and that is still a passion of mine. Ultimately, that book was about managing change. It was so powerful. I did not pick up that book to make myself a better manager, but simply out of interest.

Coming back to yoga, I think it is very powerful. To call yoga an interest or a hobby is under-appreciating what it is. To me, yoga — in its ultimate form — is a lifestyle. I have been an off-and-on practitioner for seven or eight years. It has been an eye-opening experience. It has benefited me tremendously because it helps me understand how I can use techniques to bring focus in my work every day.

Knowledge@Wharton: One last question. How many times a day do you tweet? And how many Twitter followers do you have?

Rao: A modest amount. It all depends. It is all relative. I think I have 11,000 followers from around the world. I take pride in the fact that as an international person I have followers in Brazil, in India, in the U.S., in Japan and in Korea. It is exciting for me because I travel the world and I like to meet and talk to lots of different people. I should probably tweet more.

Twitter is great because so many people publish content. It is a truly democratic publishing platform. But there is nothing wrong in people who want to consume that content and use it almost like their personal newspaper. Checking in real time — in the morning, at lunch, and in the night — about what is going on about the things they care about.

Knowledge@Wharton: It is like your personal news feed.

Rao: That is an absolutely appropriate way to use Twitter and one that we would strongly encourage people to explore to help them get over the intimidation of feeling that they have to tweet to use Twitter. That is a fallacy I am trying to dispel.

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