Ad spending on Twitter Inc fell 71% in December. Data from the advertising research firm showed that top advertisers cut spending on this social media platform after Elon Musk took over. According to the latest data from the Standard Media Index (SMI), the social media platform has changed the performance of advertisers upside down. It has introduced a number of initiatives to win back advertisers, offering some free ads, lifting restrictions on political ads, and giving companies more control over where their ads are placed.
According to SMI data, ad spending on Twitter in November fell 55% compared to last year, even though this month is typically the peak time for ad spending because they promote their products during the holiday season. Another research firm, Pathmatics, estimated that most companies stopped spending in November, the same month that Musk reinstated suspended accounts and issued verification of paid accounts that identified fraudsters as belonging to the corporation.
After Musk was impeached on October 27, 14 of the top 30 advertisers on Twitter stopped all advertising on the platform. In the Twitter Space event in November, Musk addressed the issue of companies stopping ads, saying he understands that advertisers “want to give it a minute.” Meanwhile, Kasturi has been accused by activist groups of pressuring advertisers to advertise on social media platforms. Advertising sales account for about 90% of Twitter’s revenue. Its fourth-quarter revenue fell about 35% last year due to a decline in advertising, a technology-focused publication.
Growth Of Twitter
Twitter was launched in 2006, a few years after Facebook, but at the time, and in many ways, it’s first proposition was a way for people to connect and share information about their lives. But in many ways, it is very different from Facebook. This is a very different proposition in the sense that Facebook is quickly becoming a locker for everything in your life, a way to share all your photos, vacations, life experiences, etc.
This social media platform has become a soapbox where you share your thoughts and say what you think. At the same time, there is a big problem with the level of overlap. People share pictures on this social media platform and talk about their daily lives. They also use Facebook statuses to talk about what they feel, a big problem at any time. Facebook has become a social network. So, this social media platform has taken on this reputation and image as a bit of snobbery, the kind of people who are interested in politics or technology.
It also has a different user demographic than Facebook. When I was growing up, I grew up in the early years of Facebook and Twitter. Most of my friends and peers are on Facebook and share what’s going on in their lives. But only a select few are on Twitter, and those on Twitter use it to engage in politics or share news rather than update their lives. Most website owners spend more time looking for new ways to generate traffic than other site-related activities. Knowledge about website traffic is useful when you post new content and want to monitor how many people saw your latest post.
Search Engine Optimization (SEO)
SEO means optimizing your website for major search engines like Google. A significant part of website traffic (sometimes up to 75%) comes from Google, Bing, Yahoo, and other popular search engines. To successfully monetize your website, you need to optimize your website for search engines. This allows readers to find your content among thousands or even millions of other websites. Basic SEO best practices include an easy-to-navigate website, fresh and valuable content, and a healthy community of engaged readers.
Social media
The popularity of social media sites like Facebook and Twitter has made an active social media presence a must to increase traffic to your website. Facebook marketing has taken off in the past few years and represents a whole new angle that can often reach readers and potential customers that are difficult to find using only conventional marketing techniques and SEO best practices.
How Does Twitter Make Money Through Advertising?
Almost 85% of Twitter’s revenue comes from advertising sales. Twitter’s annual advertising revenue was approximately $400 million in 2015. An individual or company can advertise on Twitter either
• Promote a tweet that appears on people’s timelines
• Whole account promotion
• Promote a specific trend, i.e. a hashtag-based topic (eg #NotInMyName) that is popular at a certain time
Photos and video previews appear next to text in posts, allowing advertisers to better present their content to their target audience. Before 2013, users had to click on posted links to view content. Twitter charges advertisers based on the amount of interaction tweets generate. While the budget is set at the beginning of the campaign itself, advertisers pay per click or retweet. Advertisers can also participate in bids to place their content in a specific space. More than 65% of Twitter’s ad revenue comes from mobile devices.
Twitter appears to be losing popularity as the social media platform reportedly struggles to retain its most active users, who are vital to business. Heavy tweeters are the people who tweet about three to four times a week — have been in “absolute decline” since the start of the pandemic, a Twitter researcher wrote in an internal document, Reuters reported on Wednesday. These “heavy tweeters” make up less than 10% of total monthly users, but generate 90% of all tweets and half of global revenue, Reuters reported.
This comes as Tesla CEO Elon Musk prepares to close his deal to buy the social media platform for $44 billion. The research also found a shift in interest over the past two years among Twitter’s most active English-speaking users, which could reduce the platform’s appeal to advertisers. Cryptocurrencies and “not safe for work” (NSFW) content, which includes nudity and pornography, are the most growing topics of interest among English-speaking power users, according to the report.
The report shows that these users’ interest in topics desirable to advertisers, such as news, sports, and entertainment, is also declining. Meanwhile, a Twitter spokesperson said: “We regularly conduct research on a wide range of trends that develop based on what’s happening in the world. Our overall audience continues to grow, reaching 238 million DAUs in Q2 2022.”
Those users are likely moving to competing platforms such as Instagram Meta Platform and TikTok, the Twitter researcher wrote. The study also expressed surprise at the decline in interest in eSports and online streaming personalities, which previously grew rapidly on Twitter.
How does Twitter make money through data licensing or “Firehose”?
What is data licensing? Twitter sells its public data, which it calls Firehose, which amounts to about 500 million tweets every day, to various companies. Companies can use this data to analyze consumer trends and create insights about brands and companies. Since tweets are public, consumers can also access this data. Thanks to the volume of data, companies can learn about their users in detail, which the average user would not be able to do. Of course, data analysis tools must be sufficiently sophisticated.
Is the Twitter Business Model Profitable? No. Rather, it has posted negative earnings every year, and after its stock fell 60% in 2016, its stock price is still considered overvalued. Unless the business model is adjusted or changed, the losses will continue. It’s a harsh truth that monetization has been a struggle for Twitter, and speculation that companies like Disney and Salesforce might acquire Twitter is rife.
One change it may make to its model is to introduce tiered pricing, where users are charged annual subscription fees and provided with extra services based on their tier. However, this is only possible when it is positioned as a media company and not a social network, as other social networks, such as Facebook, will always remain free.
There is no doubt that Twitter is a very effective means of communication, but it is not that sticky for the average person. It is based on the sharing of information by an individual rather than individuals in a social network of friends and is, therefore not as personal as some other social networks. He is the best at what he does and thrives during live events by making the best use of the internet in real-time. Only time will tell if minor tweaks to its business and revenue model are enough to get it on the path to profitability or if a complete overhaul is needed to keep it from being acquired by another player.
Edited by Prakriti Arora
