Since Twitter has gone public it has come under much closer scrutiny concerning the number of users and generated revenue. Twitter is not growing, it may actually be stagnating, in users. Revenue is not yet at the level the 140 character social network needs to satisfy shareholders. Dick Costolo has left the company as CEO and new blood is needed to to fill his shoes. The first thing founder and interim CEO Jack Dorsey and the new CEO will need to do? Get twitter adoption to higher levels in general and specifically on Android. And make clear what Twitter has to offer advertisers that other platforms do not.
The numbers
When we look at several statistics we see that twitter is not doing as it should. In the App Annie app download lists we see that new downloads of twitter (#21 iOS iPhone, #46 Google Play) are much lower than for example Instagram (#4 iOS iPhone, #6 Google Play). This is not only in the US, but a worldwide phenomenon. Also when we look at the Comscore user numbers we see that the number of people using twitter on tablets and smartphones has gone down. And this is also the case for desktop. This is killing when you know that social networks are primarily used on mobile devices. The dip in September/October is caused by iOS visitors going down sharply on iPad as well as iPhone while Android grew slowly.
Then we have the desktop Twitter numbers which also have been going down according to Comscore. And those are not mitigated by mobile visits. The introduction of Periscope has als not yet shown any results in adding new users. It has created media buzz and existing user engagement, but how this will get new users and revenue into Twitter is unclear.
Advertisers and reach
The most important source for Twitter for revenue is some form advertising. Twitter has set up different forms of advertising and idea's for monetization and the accompanying sales and marketing organization. And revenue is growing but not enough to cover losses.
The most important thing for advertisers is reach and engagement. Meaning how many people are on your platform and how long are they on it. And we are of course talking about the advertisers that matter. Procter & Gamble, Unilever, car manufacturers, farmaceuticals, appliance and electronics manufacturers. Global advertisers with budgets starting at $300 million a year. At the top of course Procter & Gamble which spent almost $15 billion in advertising globally in 2010. The top 10 alone are worth $50 billion a year in spending.
Twitters reach staying at the same level or stagnating while competitors are growing is not a good sign for these advertisers and the agencies that represent them. Furthermore the advantage Twitter has over other digital advertising platforms is not clear to them.
Apple, iOS and advertising
When we look at the numbers of visitors from mobile devices we see that Twitter stays at the same level on Android as well as iOS. A very large portion of Twitter users are on iOS devices. The problem with iOS is that it is especially strong in the US and several other modern markets (eg. UK and Japan) but much less in emerging markets. Even in the US Android is 40% of web visits and worldwide this is 60% according to Statcounter Global stats. While emerging markets like Brazil, Russia, India and China are where a very large chunk of the before mentioned ad spending is going.
Secondly Apple came out swinging against advertising with a statement by Tim Cook that they won't collect data for advertising at Apple and that they will allow adblocker apps. This of course is a direct swipe at Google and Facebook, but also at the whole advertising industry in general. How much of this is grandstanding is not really clear, but it is worrying for Twitter since it is clear that they are dependent on advertising.
It is also clear that Twitter is very dependent on the US market and iOS installed base. While advertisers on a global scale want to advertise for as many people as possible in any location. Twitter is stagnant on a mainly US non growing platform which claims not to like the advertising business.
Facebook and Android sitting in a tree...
In 2012 Facebook realised that giving everyone at the company an iPhone was not a smart move. A majority of the mobile users were already accessing Facebook via Android. And they saw the predictions that much more Androids would be shipped in the future than iOS devices. But the people developing for Facebook had no Android experience. A program called droidfooding was created to get Facebook employees to start using the Android platform. Facebook has 1 billion downloads on Android, Instagram has 500 million downloads, while Twitter has 100 million.
Facebook of course is much more ubiquitous, but they have seen to it that their app and mobile works lightning fast on Android. In my opinion one of the few things in which it beats the Google+ app. While the Twitter app is very slow on Android. Which is strange since the base of twitter is messages no longer than 140 characters.
It is clear that Facebook wants to serve advertisers as much as possible on all types of platform. They are dependent on the number of users and the time they spend on Facebook. So investing in all platforms is of the highest importance. That is also why they have invested in buying Instagram and Whatsapp. To find new users or to keep exisitng users on board. In short they go where the users are.
Google(+) and Android
Google is a very important player for Twitter. Not so long ago Google and twitter cut a deal where the searchgiant would once again show search results from Twitter. Twitter needed this badly because as mentioned the number of people visiting is not growing. Via search results more people can access Twitter content and engage with the site which is interesting for advertisers.
Google also has its own social network and the interesting thing is that even though the media regularly talks about Google+ being dead it is giving Twitter, LinkedIn, Pinterest, Tumblr and Instagram a run for its money. Even on iOS devices as you can see from the Comscore numbers. And importantly Google+ is not advertising driven. Google+ is also the complete opposite of Twitter since it offers a complete social solution from messaging, to blogging to public broadcasting. It also runs purely on the power of Google and Android as a platform. Basically making it possible to communicate privately with loved ones as well as broadcast publicly to thousands and anything in between. And these offerings are continually improved and added to.
Twitter just does not have this type of clout or product offering. As a brand it is not well known enough and to the general public it is not clear why they should use Twitter next to following news or celebrities.
Technology
The great advantage of twitter, 140 characters and speed of dissemination of information are also its biggest disadvantages. Breaking news is well served by it, but most other types of communication turn ephemeral at best.
Twitter introduced more images and lately video and also livestreaming via Periscope. But Instagram is beating Twitter when it comes to image sharing and being known for that. If native video is going to help is unclear since there is no advertising on it yet. How they will monetize Periscope is also unclear.
These are interesting product developments but are late to market since other social networks already have introduced similar products and features. New developments have come, but twitter strategywise still runs on an artificial limitation from when it was introduced in 2006. While smartphones and online experiences have moved quite a bit forward in the last 9 years and are no longer limited to 140 characters even in less developed economies.
Conclusion
So twitter is:
- based on an outdated concept (140 characters)
- is not attracting new users
- especially strong in one market and on one advertising hostile mobile platform
- does not have the same mass appeal of Google or Facebook
- is not niche enough like a Pinterest, Instagram or LinkedIn
- new developments are slow and unclear what they mean for revenue
- USP's of the platform are not clear for advertisers
- for general public the twitter use case is not clear
When you list this you might think who is responsible for Marketing at Twitter? Well actually no one as far as I can gather from the about page of Twitter. Unless it is Adam Bain who has been at twitter since 2010, who was rumored to follow Costolo as CEO of Twitter. He or anyone else has their work cut out for them. To compete globally the following must happen:
- Desktop users must grow or at least remain stable
- US iOS user numbers must grow
- Global iOS, Android and desktop user numbers must grow, mobile in double digits
- new products and features must be rolled out much faster
- get the sales and marketing operation up to speed at a much faster pace
And last but not least:
- (Re)define what Twitter actually is as a platform. How can a 140 character public messaging system be transformed into a successful advertising platform? How does it relate to users and advertisers?
Big challenges with shareholders breathing down your neck and it does not look like there will be big upturn soon. Twitter needs to grow fast or make crystal clear to advertisers what is the advantage of the platform as it stands now. If twitter does not come with answers soon the coming year will be a rocky road.
The numbers
When we look at several statistics we see that twitter is not doing as it should. In the App Annie app download lists we see that new downloads of twitter (#21 iOS iPhone, #46 Google Play) are much lower than for example Instagram (#4 iOS iPhone, #6 Google Play). This is not only in the US, but a worldwide phenomenon. Also when we look at the Comscore user numbers we see that the number of people using twitter on tablets and smartphones has gone down. And this is also the case for desktop. This is killing when you know that social networks are primarily used on mobile devices. The dip in September/October is caused by iOS visitors going down sharply on iPad as well as iPhone while Android grew slowly.
 |
| Number of people accessing Twitter via mobile devices |
Then we have the desktop Twitter numbers which also have been going down according to Comscore. And those are not mitigated by mobile visits. The introduction of Periscope has als not yet shown any results in adding new users. It has created media buzz and existing user engagement, but how this will get new users and revenue into Twitter is unclear.
Advertisers and reach
The most important source for Twitter for revenue is some form advertising. Twitter has set up different forms of advertising and idea's for monetization and the accompanying sales and marketing organization. And revenue is growing but not enough to cover losses.
The most important thing for advertisers is reach and engagement. Meaning how many people are on your platform and how long are they on it. And we are of course talking about the advertisers that matter. Procter & Gamble, Unilever, car manufacturers, farmaceuticals, appliance and electronics manufacturers. Global advertisers with budgets starting at $300 million a year. At the top of course Procter & Gamble which spent almost $15 billion in advertising globally in 2010. The top 10 alone are worth $50 billion a year in spending.
Twitters reach staying at the same level or stagnating while competitors are growing is not a good sign for these advertisers and the agencies that represent them. Furthermore the advantage Twitter has over other digital advertising platforms is not clear to them.
Apple, iOS and advertising
When we look at the numbers of visitors from mobile devices we see that Twitter stays at the same level on Android as well as iOS. A very large portion of Twitter users are on iOS devices. The problem with iOS is that it is especially strong in the US and several other modern markets (eg. UK and Japan) but much less in emerging markets. Even in the US Android is 40% of web visits and worldwide this is 60% according to Statcounter Global stats. While emerging markets like Brazil, Russia, India and China are where a very large chunk of the before mentioned ad spending is going.
Secondly Apple came out swinging against advertising with a statement by Tim Cook that they won't collect data for advertising at Apple and that they will allow adblocker apps. This of course is a direct swipe at Google and Facebook, but also at the whole advertising industry in general. How much of this is grandstanding is not really clear, but it is worrying for Twitter since it is clear that they are dependent on advertising.
It is also clear that Twitter is very dependent on the US market and iOS installed base. While advertisers on a global scale want to advertise for as many people as possible in any location. Twitter is stagnant on a mainly US non growing platform which claims not to like the advertising business.
Facebook and Android sitting in a tree...
In 2012 Facebook realised that giving everyone at the company an iPhone was not a smart move. A majority of the mobile users were already accessing Facebook via Android. And they saw the predictions that much more Androids would be shipped in the future than iOS devices. But the people developing for Facebook had no Android experience. A program called droidfooding was created to get Facebook employees to start using the Android platform. Facebook has 1 billion downloads on Android, Instagram has 500 million downloads, while Twitter has 100 million.
Facebook of course is much more ubiquitous, but they have seen to it that their app and mobile works lightning fast on Android. In my opinion one of the few things in which it beats the Google+ app. While the Twitter app is very slow on Android. Which is strange since the base of twitter is messages no longer than 140 characters.
It is clear that Facebook wants to serve advertisers as much as possible on all types of platform. They are dependent on the number of users and the time they spend on Facebook. So investing in all platforms is of the highest importance. That is also why they have invested in buying Instagram and Whatsapp. To find new users or to keep exisitng users on board. In short they go where the users are.
Google(+) and Android
Google is a very important player for Twitter. Not so long ago Google and twitter cut a deal where the searchgiant would once again show search results from Twitter. Twitter needed this badly because as mentioned the number of people visiting is not growing. Via search results more people can access Twitter content and engage with the site which is interesting for advertisers.
Google also has its own social network and the interesting thing is that even though the media regularly talks about Google+ being dead it is giving Twitter, LinkedIn, Pinterest, Tumblr and Instagram a run for its money. Even on iOS devices as you can see from the Comscore numbers. And importantly Google+ is not advertising driven. Google+ is also the complete opposite of Twitter since it offers a complete social solution from messaging, to blogging to public broadcasting. It also runs purely on the power of Google and Android as a platform. Basically making it possible to communicate privately with loved ones as well as broadcast publicly to thousands and anything in between. And these offerings are continually improved and added to.
 |
| Google+ not number one, but 27 million iPhone users is respectable |
Twitter just does not have this type of clout or product offering. As a brand it is not well known enough and to the general public it is not clear why they should use Twitter next to following news or celebrities.
Technology
The great advantage of twitter, 140 characters and speed of dissemination of information are also its biggest disadvantages. Breaking news is well served by it, but most other types of communication turn ephemeral at best.
Twitter introduced more images and lately video and also livestreaming via Periscope. But Instagram is beating Twitter when it comes to image sharing and being known for that. If native video is going to help is unclear since there is no advertising on it yet. How they will monetize Periscope is also unclear.
These are interesting product developments but are late to market since other social networks already have introduced similar products and features. New developments have come, but twitter strategywise still runs on an artificial limitation from when it was introduced in 2006. While smartphones and online experiences have moved quite a bit forward in the last 9 years and are no longer limited to 140 characters even in less developed economies.
Conclusion
So twitter is:
- based on an outdated concept (140 characters)
- is not attracting new users
- especially strong in one market and on one advertising hostile mobile platform
- does not have the same mass appeal of Google or Facebook
- is not niche enough like a Pinterest, Instagram or LinkedIn
- new developments are slow and unclear what they mean for revenue
- USP's of the platform are not clear for advertisers
- for general public the twitter use case is not clear
When you list this you might think who is responsible for Marketing at Twitter? Well actually no one as far as I can gather from the about page of Twitter. Unless it is Adam Bain who has been at twitter since 2010, who was rumored to follow Costolo as CEO of Twitter. He or anyone else has their work cut out for them. To compete globally the following must happen:
- Desktop users must grow or at least remain stable
- US iOS user numbers must grow
- Global iOS, Android and desktop user numbers must grow, mobile in double digits
- new products and features must be rolled out much faster
- get the sales and marketing operation up to speed at a much faster pace
And last but not least:
- (Re)define what Twitter actually is as a platform. How can a 140 character public messaging system be transformed into a successful advertising platform? How does it relate to users and advertisers?
Big challenges with shareholders breathing down your neck and it does not look like there will be big upturn soon. Twitter needs to grow fast or make crystal clear to advertisers what is the advantage of the platform as it stands now. If twitter does not come with answers soon the coming year will be a rocky road.
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