Twitter's Q4 results might have seen it announce revenue growth of 116 per cent to $243m and a rise in its usership to 241 million monthly users globally, but it hasn't stopped analysts from being diasppointed, especially following Facebook's figures last week. Here's what some in the social media and digital marketing space thought of the numbers.
Lyndsay Menzies CEO, 8 Million Stories
It is clear that Twitter are desperately trying to diversify their offering through new features such as custom timelines, and photo sharing enhancements. However, this may not be enough to improve user experience to the point where usage increases significantly. Recent changes over the past few months haven’t been particularly well received. One of the main issues is perhaps that the original user base of Twitter enjoyed the uncluttered feel and the ability to use the platform without being bombarded with advertising. Balancing what the user wants from the platform with the need to create decent advertising revenues was always going to be a huge challenge for Twitter. They have a job on their hands to create an enhanced offering that’s still attracts these original users, is different enough from Facebook and combats the even bigger challenge of attracting a broader user base. Twitter, is still confusing and daunting to many users, particularly those who are less tech savvy. From an advertising perspective, we find that in many instances advertising on twitter doesn’t give anywhere as good a return as other paid media channels for clients. Probably as a result of the audience being less amenable to being targeted with ads. Targeting, whilst improved, still isn’t great and costs can be prohibitive.
Jonathan Lyon, global director of strategic insights, DigitasLBi
Scaremongering and ill-informed panic. It's no biggie, a storm in a tea cup. Twitter’s growth is slowing but its revenue is more than doubling each quarter. Admittedly, it is yet to make a profit. Twitter will never reach the scale of connected audiences of a Facebook or a YouTube. What it is doing is investing in its ecosystem and creating bespoke, interesting and creative engagement opportunities for brands and marketers to connect with their audiences. It is the bridge that connects disparate social platforms, the glue in the social web. Twitter has invested heavily in this strategic direction, and we've yet to see the commercial return of these efforts. Let's judge Twitter in the fullness of time and not react, in a knee-jerk fashion, to any micro-shift in meaningless metrics.
Patrick Salyer, CEO, Gigya
After Facebook’s announcement last week about its impressive earnings for Q4 2013, Twitter has come out with mixed results in its first quarterly earnings report since it became a publically listed company. And while overall user growth has slowed, the company has still managed to create a large, global user base, which has drawn in revenue from advertisers that had been eagerly waiting in the wings for Twitter to present them with a reason to invest. While Twitter’s revenue performance highlights the rather simplistic notion that social media sites are still quite popular, it also shows a fascinating shift in the public’s interest in engaging with news-led issues. Twitter is arguably the most effective network for sharing news stories and having conversations with other users and celebrities around specific topics and this is a phenomenon that is fuelling user subscriptions to the site. Our own research shows that in Europe, 45 per cent of social media users share content using Twitter with Facebook very narrowly ahead on 47 per cent. The research, along with Twitter’s growing global user base and revenues, demonstrates that the ways people now share content via social media is changing and it’s getting more sophisticated. Social media is no longer just about sharing photos of your pets with a select group of friends; it’s evolving into a truly global form of communication, with users determined to ensure their voice is heard.
Ron Schott, head of Mediabrands’ Spring Creek, UK.
Earnings reports are tricky times. Often the numbers that are reported for investors and the markets aren’t exactly telling of the momentum of a company – I think that’s the case with Twitter. Over the past year, Twitter has innovated and iterated at an incredibly quick pace when it comes to their advertising offerings. Would we like to see their user growth a bit stronger? Sure, but that isn’t always the ultimate measure of effectiveness. While most social is mobile these days, Twitter has the opportunity to continue pushing into the lead spot in the second (or third or fourth) screen battle and that’s where we see great opportunity for brands. Twitter will have to focus on somehow lowering the barrier of entry to the platform to push further into the connected mobile user market, perhaps harketing back to @jack’s initial thought that the network was more about “this is my status” – a notion that plays into younger audiences’ use of social.
Leila Thabet, managing director, We Are Social US
Twitter's first earnings announcement as a public company hasn't exactly wowed Wall Street. There are clearly challenges ahead for the platform as it looks to drive ad revenue and kickstart slower than expected user growth. One key to Twitter advertising's game plan for the coming years will be its level of success as the 'second screen' for broadcast entertainment and events. Its conversational nature is a niche that other media owners can’t tap into as easily, therefore holding a major potential revenue stream for Twitter. But despite owning the ‘second screen’ space, Twitter hasn’t yet been able to monetise its products to anywhere near the extent of Google and Facebook. At issue is Twitter’s lack of an algorithm to determine relevant content, which means it has to show all tweets a person publishes, to all of their followers. This creates a crowded and time-sensitive newsfeed, and promoted tweets can add to the confusion. Despite the roll out of a self service platform, there is currently limited inventory availability, which means limited income potential for Twitter. To combat this, Twitter will need to launch more new products in 2014 to find the cash cow that can deliver significant ad revenue. These include more Twitter Cards, focused on providing users with shortened, more targeted purchase experiences, and further evolution of the 'custom timeline' to reduce clutter and increase share of ad impressions.
// Featured in this article
8 Million Stories
Headquartered in Edinburgh, with a growing presence in London, 8 Million Stories is a content monetization agency that connects content and digital marketing to give our clients a clear ROI. With a client base that includes the BBC, William Grant & Sons, Farfetch, Condé Nast, lastminute.com, Blackcircles.com and Occa-Home.
Find out more