Twitter sees 'sack of gold' at Brazil World Cup

While Brazil struggles to finish its stadiums in time for the 2014 World Cup, Twitter is already working to cash in on what the U.S. company's head of revenue, Adam Bain, sees as a potentially huge business opportunity.

Robust consumer spending, growth potential from still-low Internet penetration and fast adoption of smart phones have turned this nation of 194 million people into an attractive market for Twitter and other online giants.

With soccer's World Cup rapidly approaching and the 2016 Olympics around the corner, Brazil stands out as the kind of opportunity a company under pressure to monetize its 200 million-strong user base doesn't want to miss.

"You think about the next 10 years in Brazil and it is really going to be amazing from a business perspective," Bain, Twitter's global president of revenue, said in an interview on a visit to Sao Paulo this week.

"Brazil is the largest opportunity we see in Latin America and frankly across all of the other markets," the executive said. "That's why we are here building and we will continue to invest in this market in a big way."

The World Cup and the Olympics are meant to showcase Brazil's status as an emerging economic power. But with just a year left before the opening match, Latin America's biggest economy is struggling to finish new stadiums and put in place key infrastructure such as G4 mobile networks.

For Twitter, the international sports events are also crucial. The San Francisco-based company saw record levels of traffic during the 2012 London Olympics and launched a model of integration with TV that company executives like Bain think may be a substantial part of its monetizing strategy.

Twitter makes money through its "promoted tweets" or advertisement posts that users receive in their tweet feeds. The company is expected to generate nearly $600 million in revenues this year, according to the research firm eMarketer.

Bain, the man in charge of turning Twitters' huge user base into money, came to Brazil to talk to businesses that are starting to lay out their strategies for the World Cup and the Olympics.

"Some of our most strategic deals that we have signed with marketers, which are global deals that we have signed over multiple years, many of them include work that they want to do here in Brazil during the World Cup and the Olympics," he said.

The challenge is not so much explaining to marketers why they have to incorporate the microblogging platform into their marketing strategies as it is to show them how to do it.

BRAZIL, A NO-BRAINER

Twitter is one of the latest U.S. Internet companies to land in Brazil, an emerging market that has embraced social media with almost religious zeal.

Just six months ago the company hired a former Yahoo! executive to lead the charge and the sense of work in progress is apparent in the impersonal, half-empty rental office Twitter occupies in Sao Paulo's financial district.

But things have changed since rival Facebook got here a couple of years ago. Brazil's once hefty economic growth slowed down to a mere 0.9 percent in 2012 and mounting inflation is beginning to dent consumer confidence, dimming some of the enthusiasm over the Internet's potential here.

And yet Bain says opening an office in Brazil was a no-brainer. Even before setting foot here, the country was already Twitter's No. 3 market after the United States and Japan, with an estimated 40 million subscribers.

"The overall impact has potential to be huge," he said when asked when asked about the revenue Twitter expected from the World Cup and the Olympics, which he declined to estimate.

An Internet penetration rate of just 44 percent - half that of the United States - combined with soaring sales of smart phones to a booming middle class, make Brazil attractive in the long run for companies like Twitter and Facebook.

And, according to Bain, users in Brazil are responding better than others to advertisement in the form of "promoted tweets," with an engagement rate two or three times higher than the global average.

"The world's spotlight is going to move to Brazil in a very dramatic fashion and investment certainly follows with that."


/Reuters/