Does Twitter Have What it Takes to Finally Beat Facebook?
Twitter was a unique platform that seemed to dominate social media when it first came out. However, that momentum is lost, as user activity is dropping on the site. With fewer people using it, things have not been looking very good for Twitter.
Although both Twitter and Facebook have had rough beginnings when they first publicly traded, Facebook turned things around for the better, where 66% of their revenue comes from mobile ads. There are no profits for Twitter to depend on. Sadly, all they’re seeing is an increase in losses.
Still, the company has high hopes for their website and their still 320 million monthly active users. They believe they’re still doing well, even if the numbers don’t show it, because many people aren’t registered users. Critics state that the function of Twitter is still not fully understood or of use to the typical person.
Instead, these people are flocking to Facebook, where their messaging app is twice as large as Twitter. Nevertheless, Twitter still has one upper hand over Facebook, in that their content is public and is updated by the second. Such rapid updates make Twitter the platform ideal for spreading any news.
Twitter may have just over 300 million active users, and they’re now trying to monetize the 200 million users that can see embedded tweets. Right now, unlogged users that can’t see tweets find them through various other outlets. A majority of tweets come up through Google search results or when people click ones that are shared with them. If you were to combine Twitter's logged and unlogged audience, it would mean that their true monthly audience is nearly half a billion people that send 185 billion messages each quarter.
With those numbers, Twitter plans to close the gap in losses and profit. During a presentation last year, Anthony Noto, Twitter's chief financial officer, stated that their original strategy was to focus solely on the active members rather than the total members can use their platform. He added that all the guest users come to the site organically, which gives them a wonderful opportunity to provide these individuals what they want. It’s not clear whether or not users would like to see ads from Twitter, but it’s a plan Twitter is looking to implement to boost their profits.
Noto also hinted that a particular publisher network that would allow the company's ads to get distributed around the internet just like tweets are. Noto mentioned how he felt goosebumps run up and down his spine during a practice run that Adam Bain, the chief revenue officer gave. Noto also said that if there is anyone who doesn’t believe that the company will have a good ROI to advertisers after hearing Bain, then they are never going to believe.
One year after the presentation, Twitter started test runs on the ads throughout certain countries. Bain later revealed that they are geographically limited to choose advertisers in the United Kingdom, Australia, Japan, and the United States. However, Bain stated they plan to expand to other areas after further testing gets completed. The tests will see just how well the company generates revenue off the people who view tweets on a monthly basis, but never sign into the platform.
It was revealed that the ads Twitters will show will be in the form of promoted tweets for people to see them. Some of these promoted tweets and videos will begin showing on user profile pages as well as tweet detail pages only on computers. The ads are expected to expand to mobile devices sometime later. These ads will get targeted to certain people based on the context in which they came across a tweet instead of data for users that are actively logged in the site. These tailored ads will only be available to users that currently have an account, and the company will be still able to push unspecified ads to those without one. It is still possible for Twitter to provide some relative ads to those not logged in via tracking.
Bain also added that Twitters wants to do nothing more than to ensure these ads contribute to a user's overall experience. He said none of the ads will display ads or products that pop up, interrupt and ultimately ruin a user's experience. Jack Dorsey, Twitter's CEO, was talking about the great potential the company would have financially. The new ads may even help Twitter have yet another advantage against Facebook. During a conference, Dorsey said that everyone will see Twitter work hard to ensure a great user experience.
Bain added that the company wants to ensure that advertisers return on investment will remain as strong for marketers that will deal with logged out users as it is for those with accounts. Bain did not give a response as to how much money he believes the company will generate with the new idea, though targeting half a billion users monthly is a large number of people. It is more than enough to make serious waves on Wall Street later in the future.