Mobile Fix: Twitter doubling down
As Twitter’s stock takes a tumble, Simon Andrews, founder of Addictive!, looks at the challenges the platform is facing and what it can do to source new streams of revenue.
Talking with Facebook this week about their plans for the ad network there was a lot of buzz about their 10th birthday and their great results last week.
Their optimism extended to Twitter investors and the Twitter stock price increased last week too – but came crashing down when the Twitter results came out. Why? The revenue figures beat expectations by being up 116%. But user growth is sluggish, with just 9 million new users in Q4.
Many investors thought Twitter could rival Facebook in terms of numbers and Twitter has encouraged this:
“Everything we are doing is oriented around getting to 2 billion users.”
But this dramatic growth is going to be an ongoing challenge. One of the pioneers of growth hacking references his experience at Twitter:
“We dug in and tried to learn what the “aha” moment was for a new user and then rebuilt our entire new user experience to engineer that more quickly.”
“It turned out that if you manually selected and followed at least 5-10 Twitter accounts in your first day on Twitter, you were much more likely to become a long term user, since you had chosen things that interested you. And if we helped someone you know follow you back, then even better. As we kept tweaking the features to focus on helping users achieve these things, our retention dramatically rose.”
That worked but now needs reengineering as Twitter seeks to cross the chasm to become truly mass market . CEO Dick Costolo talks of “doubling down on accelerating growth in our core user base.”
His challenge is doing this whilst retaining the ‘soul’ of what is a vital tool for so many and delivering a user experience that satisfies a new users as well as a veteran.
Digging into the details we see that three quarters of the traffic is mobile and three quarters of the revenue is too. So that UX rethink has to be mobile first too.
But advertising doesn’t have to be the only revenue source; as we mentioned last week the new generation of Messenger apps – many from Asia – have a more diversified revenue base.
It seems Twitter is looking at how it can leverage e-commerce with rumours of a tie up with Fancy circulating.
Adtech – Wild West?
You can tell the US CEO of the Internet Advertising Bureau, Randall Rothenberg, used to be a journalist by how he titles his speech.
His latest is a must read both because of the title: The Digital Advertising Industry Must Stop Having Unprotected Sex – and the content.
The full article summarises the effect:
…advertisers have lowered the prices they will pay for online ads, in part to offset the cost of fraud, non-viewability, and unsafe environments. This hurts legitimate publishers and innovators, even as it rewards a small number of villains.
The murky Wild West of online advertising is probably holding then industry back right now.
Stories around this theme keep popping up; Autonomy spin off blinkx saw its share price plummet after a Harvard Business School professor’s analysis of their business – with allegations of adware which deliver invisible advertising.
And a story about Google trying to clamp down on fraudulent views on YouTube has had wider coverage. This isn’t about advertising per se, but adds to the background noise that online is the Wild West.
And even the legitimate innovation in adtech can cause issues; WPP merging their Audience Buying company Xaxis with their ad network 24/7 has raised eyebrows and inevitably competitors are suggesting conflicts of interest. It is certainly an evolved way of dealing but if they can keep clients happy it’s a smart use of assets.
However the opaqueness of this whole space adds fuel to the luddites who position digital as still a sideshow. As one of our Google friends points out, we are not making the most of the technology – yet.
Content – experience not information
The CEO of Snapchat made his name turning down a $3 billion offer from Facebook. As some people pointed out at the time he believes there is a huge potential for his business beyond sexting.
This speech by him is interesting and we found this quote really insightful:
I’ve found that one of the biggest issues is that frequently technology companies view movies, music, and television as INFORMATION.
Directors, producers, musicians, and actors view them as feelings, as expression. Not to be searched, sorted, and viewed – but EXPERIENCED.
Most tech players are more about the platform and whilst they carry content, they aren’t that involved in it. We too think people want to experience content, and we see this as an opportunity.
Most of the people who do get content are still married to the platforms they grew up with. For example the big success story from content and digital in the UK is probably the Mail. The new results show MailOnline grew its audience by 41% over the year and digital revenues by 48% for the quarter.
Which sounds great, until you note the digital revenue for “the world’s most popular news site” was £14 million whilst the UK only print titles made £53 million in the same period.
So there is still a lot to do. For example, MailOnline doesn’t have a mobile optimised site yet. The opportunity is to better blend the offline and online world – and find new ways to use content to deliver experience.
As and when good examples arrive, they will inspire others.
Three years ago a Conde Nast CEO dismissed our view that Net-a-Porter was a threat to their business – although since then they have been quite active digitally. Now the Net-a-Porter team are taking their very successful digital content business and producing a print magazine.
Despite the gloom and doom in the print industry, niche magazines are thriving – visit any good newsagent in London or New York and the choice is amazing. If you can combine this interest in good content with a business model like that of Net a Porter, you have a great opportunity. The smart people at Business of Fashion have a longish video interview with the Porter team here.
This is an edited and abridged version of Mobile Fix – click here to read the full article on Addictive!’s website