Every business, be it a brand or a platform, needs to tell a story about itself. Unfortunately Twitter has become beholden to a narrative it constructed but no longer wants to emphasize.
Twitter’s growth rate may have exceeded Wall Street’s expectations on Tuesday, but its year-to-year growth in monthly active users continued to decline, from 25 percent in the first quarter to 24 percent in the second quarter, according to the company’s quarterly filings. With this trend expected to continue, eMarketer predicts Twitter’s user growth will continue to plateau through 2018 in all regions worldwide, Twitter has begun emphasizing how its cultural influence extends far beyond the bounds of Twitter.com.
During Tuesday’s earnings call, Twitter CEO Dick Costolo made a point to highlight Twitter’s reach and impact beyond its own and operated properties, referencing a single World Cup match that generated 2 billion Twitter impressions outside of Twitter.
While Twitter’s influence narrative is essentially true, it doesn’t do much to help Twitter’s pitch to investors. Twitter has become an integral part of news and entertainment media; whether it be anchors referencing tweets during broadcasts, correspondents tweeting dispatches from the ground or publications embedding tweets into digital articles, tweets can indeed be found in myriad places that are not, in fact, Twitter. But rarely do promoted tweets from brands — the ad products that keep Twitter afloat — have reach beyond Twitter. Meaning financially, the point is moot.
“That helps NBC and CNN. It doesn’t do a hell of a lot for Twitter advertisers,” David Berkowitz, CMO of digital agency MRY, told Digiday.
And in the rare case a brand-related tweet does garner attention outside of Twitter, Twitter doesn’t necessarily see a monetary benefit. Take Ellen Degeneres’s headline-generating selfie tweet, which Publicis CEO Maurice Levy speculated was worth between $800 million and $1 billion to client Samsung. Levy said Publicis orchestrated having Degeneres take the selfie and tweet the selfie from a Samsung phone. Twitter being able to fetch up to $1 billion for a single tweet would expel any doubt about the health of its business. Except Twitter was left out of that transaction; if a marketer pays a celebrity hundreds of millions to tweet on its behalf and the tweet goes viral without paid promotion on Twitter, Twitter generates no revenue from it.
“The user growth problem is overblown,” Brian Wieser, senior analyst at equity research firm Pivotal told Digiday. “The issue is that management prioritized this aspect of their business and has so far not changed what seemed an inevitable outcome around decelerating growth of users.”
It’s an inherent, somewhat unavoidable downside of being a free-to-use platform. But it’s also a missed opportunity for a company that’s trying to monetize its off-platform influence.
Matthew Wurst, general manager of social at digital agency 360i, the company responsible for Oreo’s similarly popular tweet during the Super Bowl in February 2013, said “most social content has limited reach beyond the walls of where it is published.”
“Outliers, like Ellen [Degeneres] and Oreo, have helped increase awareness of what a platform like Twitter can do, but neither of those successes happened without television or PR support,” Wurst added.
Media buyers remain bullish on Twitter despite these limitations, though, saying that while Twitter’s user base may be smaller than those of other platforms (namely Facebook), it affords a generally deeper connection between a brand and its followers.
This enthusiasm is reflected in Twitter’s revenue growth which reached $312 million this quarter, a 124 percent increase from the same quarter a year before and a jump from the $250 million in revenue it generated in the first quarter this year.
“It’s still a unique and evolving platform and that size isn’t the core metric,” Mediacom managing partner Michael Lampert told Digiday. “Twitter’s audience products and ability to insert brands message into conversations in real time, say when a specific TV show is on and a user tweets about the content, results in engagement that is very valuable.”
Much of Twitter’s ability to expand its ad business beyond its platform proper rests on MoPub, the mobile ad network Twitter acquired in September 2013 and is now using MoPub to serve ads across different mobile apps. Twitter hopes that these ads will not only help its ads business, but help Twitter onboard more users.
Berkowitz said Twitter’s user growth problem isn’t due to lack of exposure, but because the platform remains inscrutable to many laypeople. Twitter toyed with new sign up features during the World Cup as an experiment in making the platform more accessible.
“If Twitter is used in newscasts and online articles, then why aren’t more people using it?” he asked.
How newsroom unions intervene when members get laid off
Amid the recent wave of media layoffs, here are some of the ways newsroom unions are intervening.
Despite Q1’s slow start, publishers are bullish about events revenue for 2023
Publishers like BDG and Apartment Therapy are banking on events revenue to give them a leg up in 2023.
Media Briefing: The case for and against monthly and annual subscriptions in the battle for retention
There are no one-size-fits-all solutions for improving retention in a subscriptions business. While annual subscribers might stick around longer for some, other publishers will have better luck with monthly plans.
SponsoredHow Rumpl and Replacements got creative with CTV ad production and media buys
Sponsored by MNTN This year, marketers are balancing multiple priorities, including the convergence of two trends: the growth of CTV advertising and economic uncertainty impacting ad budgets. To keep costs low while generating ROI, savvy brands are embracing innovative approaches to production and media buys. These tactics allow advertisers to continue reaching audiences on CTV […]
Digiday+ Research: The economy will hit the media and marketing industries this year, but differently
The economy will plague both the media and marketing industries in 2023, but the hit will be uneven between publishers and agencies.
Podcast ad buyers have yet to see a slowdown
Ad buyers have yet to see clients cut their podcast budgets – though the time of podcasts as the shiny new medium may be coming to an end.