Should Twitter's slowdown in growth be seen as a cause for concern?
Every now and then when a new social network messaging app, a photo sharing app or a short-messaging service gets popular our clients ask us: “Is it relevant for our marketing? Should we invest in content and/or ads on this channel?”
And often enough, the new kids on the block are not prepared for monetisation and are a pain to work with; complicated products, bad service or simply not enough client service personnel.
For Facebook and Twitter, these days are over. Twitter is staffing heavily, improving client service and is actually a joy to work with. It puts out great products that prove to have an above average ROAS (return on advertising spend).
The news this week that shares in Twitter have dropped to their lowest levels since the company’s stock market floatation, and that the platform’s user growth has been slower than expected over the last quarter, may not paint as positive a picture. But the fact that it also posted revenue of $250m, most of which ($226m) came through advertising, shows that brands still find the platform an extremely valuable way of communicating messages to consumers – and I can’t see this changing for a long time.
Of course, Twitter will most likely remain a niche service – but an extremely powerful one, with great targeting options and products. And if it keeps building its sales team and products as it is doing, I honestly believe it will have a great future on the stock market.
We have all seen how rapidly media plans are shifting from being “traditional media” focused, relying on the likes of Print and TV, to digital. Within this digital investment, the amount of spend allocated to social is still very minimal, compared to display. But Twitter has been clever in the way it have approached and attracted advertisers.
Rather than trying to tap into more of a client’s “digital” spend allocation, its sales strategy has been to target TV budgets, emphasising how successfully the platform can complement TV and help boost its performance (and there are plenty of case studies to prove this) – giving consumers a deeper and more engaging experience by continuing the TV story online.
Advertisers are gaining more and more trust in paid social - because it works – and in the coming years I think we will see a dramatic budget shift to support this trend. In some markets this will be like a landslide; in other more conservative ones, maybe a slower glacial movement – but a movement nonetheless.
The tendency is clear and irreversible: we’re standing firmly in the "age of social and mobile", and the marketing money being spent online and on channels such as Twitter is only set to grow in the years to come. So, my advice to those stockbrokers? Buy!
Roland Fiege is head of social strategy at IPG Mediabrands G14