What’s eating Twitter?

29 Oct
2015

 

With stories linking the CEO Jack Dorsey to an early exit of his prospectively short ‘permanent’ role at Twitter, what does it take for a social media platform to really perform? Despite posting a rise in revenue for three months to September, “pace of growth in active users was the slowest since it joined the stock market in 2013.” Which is why the company’s shares fell 11% after the results announcement. When you combine this information with the fact that Facebook shares are busting at the market cap, and the average monthly users are an astounding 1.49 billion to Twitter’s 316 million. It seems like the problem Twitter faces (pardon the pun) is simple, generate as many monthly users as Facebook or face the reality that your marketing revenue will always be a fraction of that of Facebook.
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All that seems simple enough, but here’s why we think Twitter isn’t completely lost at sea yet. The strength of social media has adapted the face of marketing so much in the last 5 to 10 years that the market still does not know how to effectively value their potential. Facebook makes it’s money offering marketers an incredible amount of specific information to target their ads at exactly the right potential customers, providing a great return on investment, which is so far unavailable in any traditional form of marketing. Money that can be wasted on printed marketing, can now be much more intelligently spent through digital marketing. Printed circulations might reach 50,000 readers but how many of them are in your target area or matching your other demographics? So as long as Facebook’s value is measured in its marketing potential through targeted ads, then the measurement of Monthly Active Users is a vital statistic. With the lower monthly users that Twitter has, they also don’t request all the detailed information that anyone’s Facebook page stores about them, giving them less information to sell on to advertisers.
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If Twitter continues to play Facebook’s game and try to match their performance on the same stage then I’m sure it will continue to struggle. Twitter’s principle strength is also what is known as their greatest weakness, the ‘firehose’ of content that it generates. Since Twitter began in 2006, it has almost reinvented the news industry. The print giants of yesteryear have been forced to adapt to digital versions of themselves and they also now have to compete with sites like mashable or reddit, that thrive on trending content from across the web, or more specifically Twitter. The type of stories that breed social shares and attract attention. Twitter’s strength is far from Facebook’s, the sale of information. The potential of Twitter is to control the conversation that the World is having. There is seldom an advertisement that doesn’t include a ‘#’, and it is not confined to marketing. Political movements have hinged on Twitter, such as #BlackLivesMatter, presidential candidates rely on Twitter for their campaigns, sometimes to their misfortune, #Trump2016. When Twitter realises how to monetize the topic of conversation for the World, then their stock shares will undoubtedly begin to climb.

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