Twitter has been struggling since its inception to find a path to real revenue.
As a platform, Twitter is a great discovery mechanism for news and the interests of people you’d like to connect with. It’s an opportunity to engage a business leader in a conversation that they started online. It’s a chance to keep up to date with what your competitors deem the most valuable content, as well as their achievements or public promotions. It’s also an opportunity to track and optimize content based on what performs best with your target audience. It is all of these things, or it can be.
What Twitter Is Missing
If we look at the top Twitter tools and lists from the past two years, very few of them are native to Twitter.
The actions that make Twitter valuable for brands -- for instance, audience growth based on target key terms or user behavior, post promotion to users with specific traits, and targeted installs -- are mostly left to third-party developers. Granted, allowing a developer community to build on your platform to make it a more effective tool for publishers is a great way to test which products convert and scale.
Unfortunately, Twitter hasn't been connecting the dots between user behaviors (consumer and business), third-party platform metrics, and the path to significant revenue.
If you look at some of the top non-celebrity Twitter pages, you can tell by the ratio of followers to following that they are using some sort of "follow/follow back," or "follow/unfollow" tool. While this drives audience numbers, it doesn't help with engagement. Therefore, it has a lower value for advertisers that want to promote via influential channels, or media companies relying on the quality of their writers or followers to activate and re-engage users.
I've spent the last five years finding and building tools to optimize audience acquisition for media and content companies. One of the things I like most about Twitter is its potential for reducing the number of clicks to a desired action and for monetization on owned and operated digital channels.
With its Quartz-style blurbs and influence-based content filtering, Twitter has the potential to be the ultimate audience acquisition platform for publishers. The following reasons could make it great, but only with the following adjustments.
Why Twitter Is A Great Platform
Twitter is a great way to consume content as a user. I can choose who I want to follow, get quick blurbs and headlines, chat about articles, and never have to leave the application. It's up to me if I want to dive deeper, or if the headline and blurb give me enough to move on to the next post.
As a publisher, I still own the impression and I'm not being dis-incentivized to give the impression and the data to Twitter in exchange for the click. Because without the click, I can't view the content, only the 140 character description.
How Twitter Must Change
Although Twitter is a great platform, a few adjustments would help it monetize and thrive.
Targeting is one. Improve targeting for pages and posts so that brands can pay to target users with specific interests. Or institute something like pixel tracking, so that brands can target users who have signed up with them before or demonstrated interest. Proper targeting means a bigger delta between lifetime value and customer acquisition cost, and therefore higher revenues for the platform.
Twitter should also be smarter about monetization. Some short, targeted video ads have finally started to appear. While I hate irrelevant ads, it's a necessary evil right now. However, if they do a better job targeting me with these ads, my distaste for them will decrease and my actions because of them will increase. Add transactional options such as click to buy, sign up, or install, and monetization will be more baked in.
User experience is another necessary adjustment. This would combine targeting and monetization to offer users actions that feel contextual but are not disruptive. For instance, when I click to open the modal window to view the content, allow the publisher to add the native Twitter monetization unit in a defined area on the screen, replacing a display ad.
A New Growth And Revenue Model
The growth and revenue model here is simple, as there are two primary KPIs for publishers. The cost of content production and promotion, and revenue (and more specifically, profits per piece of content).
The formula is simple: The revenue (profit) must be greater than the cost of content production and promotion.
If revenue per piece of content is greater than cost per per piece of content there is no limit to the ad spend. Launching a platform that allows for a range of monetization -- from display to installs, from click to buy to lead gen -- allows publishers to optimize editorial calendars around what works best. Publishers will also spend money to optimize content calendars based on projected performance.
Why Facebook Should Buy -- And Adjust -- Twitter
So why Facebook? What do they have to offer?
Although new Facebook feed rules are impacting reach, Facebook is still a top channel for publishers. The challenge is that Facebook has made it clear that it doesn't want publishers to take over users' feeds. Facebook wasn't designed as a publishing tool, and as much as they could potentially take out WordPress and Shopify, they are staying focused on the user-to-user experience.
But Facebook should buy Twitter because when it comes to audience targeting they are the 50,000-pound gorilla in the room. Publishing is a critical part of their ecosystem, and this is a way to serve that ecosystem through a platform that is better suited for news. Facebook is also the smart choice given that everyone else, other than perhaps Google, just isn't a good fit.
