Twitter Wins Advertisers But Fails to Draw Users

According to Twitter’s most recent earnings report, the company saw a record increase in revenue growth but reported a stagnant number of new users, leaving many to wonder if it’s worth the money for advertisers to stick around.

Since going public in 2013, Twitter has made an effort to court advertisers. Just last week, the company announced plans to syndicate tweets to Google, Yahoo Japan, and Flipboard, along with introducing a “Quick Promote” feature that allows advertisers to promote popular tweets at the push of a button.

The courtship has paid off with advertisers, but the company failed to draw new users to match its ad growth. In its 2014 earnings statement, Twitter reported a $479 million revenue, up 97 percent since 2013. Yet Twitter only saw its users increase by 4 million from Q3 to Q4, meaning the company still drives just one-fifth the traffic of Facebook. As business owners across the country rush to promote their best-performing tweets to lookalike users, the question remains, is anyone listening?

Yes and no, according to Dave Mastronardi, director of strategy at Sprinklr. “Brands are going to have to pay careful attention to growth,” says Mastronardi. “Twitter is making it easy for brands to spend money. The other piece is, ‘Are they getting people to sign up?’ Twitter users are social media purists and not the mass audience you have on Facebook. I think if Twitter fundamentally changes that and puts in some sort of curation algorithm, you might see more of a mass adoption similar to Facebook’s audience, but the shift will change the type of person on Twitter, so brands would need to pay attention to that.”

Others, like Branndon Stewart, chief executive of OutboundEngine, believe that even if Twitter doesn’t grow, advertisers should still take advantage of the medium, since it’s now easier to get broader reach with less effort.

“Until recently it’s been very difficult to effectively advertise and get a message across in the social world,” says Stewart. “It’s been fine for people who make a living doing that, but social media has been very difficult for someone who runs a restaurant to post enough to land in users’ Twitter feeds. Now Twitter is more like Google AdWords where you can have very targeted efforts to people and make sure that your message is seen.”

But even as Twitter ads get easier to buy, promote, and navigate, Mastronardi warns that brands should not become complacent in their messaging.

“As a marketer, all I’m worried about whether or not Twitter will be here tomorrow and if my users will still be there,” says Mastronardi.

He adds that paid social media is currently entering its golden age. In that, marketers must not forget what they’re trying to do with these social channels, which is find users and reach them.