One year after Twitter co-founder Jack Dorsey took over as official CEO, the company has yet to launch a product that has generated much excitement among advertisers — a task that’s key to the company’s turnaround.
“They’ve got to find a way to get themselves better in line with the market,” said Jason Clement, president of agency Noble People’s Los Angeles office. “There’s still a good portion of advertising that is about driving clicks. They do really poorly in that regard.”
Twitter is expected to show $605.83 million in revenue and 9 cents earnings per share for the third quarter when it reports Thursday morning, according to a Thomson Reuters consensus estimate. The company opened itself up for a potential takeover last month, but no suitors have so far made a bid. The company is also likely to cut a substantial part of its workforce soon, according to Bloomberg.
Twitter posted second-quarter adjusted earnings of 13 cents a share on revenue of $602 million. In the third quarter of 2015, the company posted third-quarter earnings of 10 cents per share on $569 million in revenue.
One media buyer said that Twitter’s advertising is vastly overpriced. This buyer paid what ultimately amounted to about $1 per click for ads on Facebook, mostly thanks to the large number of users on the platform. That same buyer’s ROI on Twitter’s advertising came out much higher: $4 to $5 per click. While they recognized Twitter gets more engagement than Facebook, the cost was still too pricey to justify for many of their clients. While a lot of newer, buzzy platforms can demand higher prices, Twitter is past that phase, the buyer said.
“I don’t think Twitter ever transferred out of their arrogance, and I don’t think they can be arrogant anymore,” the buyer said.
A Twitter spokesperson said that the $4 to $5 range was above their average and inaccurate, adding that there are many top brands that have excellent results by using its platform. They also noted that the agencies that are named in the piece are not what they consider “close partners.”
Twitter has tried different failed advertising products. It’s delved into livestreaming recently, through deals with the NFL to show Thursday Night Football games and Bloomberg to broadcast the first presidential debate. The company includes options to add short ads before and during the video or stream.
However, Twitter users don’t typically go to the platform to watch videos, Krishnan Menon, co-founder and CEO of brand transformation agency Phenomenon pointed out.
“Twitter has never been a valuable advertiser platform,” he said. “What Twitter has been is a really interesting place for brands to connect with users in interesting ways.”
For example, Best Buy’s “Twelp Force,” where its employees would respond to customer questions tweeted at the account, was a way to use the text-based, immediate response medium, he said.
Twitter is trying too many different things, none of which are managing to get advertisers more interested in the platform, said Menon. The company needs to spend more time working with brands to find a few things that might work, he said.
“The only people that can fix Twitter is Twitter itself,” Menon said. “It’s one of these things where they have to reimagine the platform and context.”
However, the problem may be with the way the platform currently works, said Stephen Beck, founder and CEO of digital agency Engine Digital. Twitter focused on connecting people with influencers and celebrities, but the majority of people want to get personalized community news and events, he said. Beck believes that’s one of the main reasons why Twitter is having a hard time bringing on new users, and if Twitter can leverage its data to find ways to show new content that appeals to people’s interests in real-time, it may help the company.
“What each user sees is completely different from what everybody else sees,” Beck said. “That’s something that Twitter should keep in mind … Twitter needs to give users a little more personalization around their interests.”
source”cnbc”
