The challenge for Twitter is how can it accelerate the commercial returns for investors whilst, at the same time, not alienating its loyal user base. It needs to figure out how to innovate with new ad formats that deliver for brands without compromising the clean simplicity that made it popular in the first place.
Looking to the future, I would expect it to experiment with different innovations and, if Facebook is anything to go by, take a few wrong turns along the way. Like Facebook, who are now above their initial IPO price, I expect them to strike the right balance in the long term through ad innovation, offering value for advertisers and investors alike.
It’s already made a start by broadening its advertising options, making more inventory available and expanding its algorithms to balance when ads are shown throughout the day. However, the speed the site moves at and the volume of tweets a second – about 9,000 – raises questions about the reach of promoted tweets. Having said that, it already understands that most users access Twitter via mobile and is targeting adverts to this channel, which is something Facebook admitted it took longer to do.
The challenge for advertisers remains how to get the best ROI from Twitter ads and how to measure that in a consumer’s path-to-conversion. As Facebook has successfully proven, social media channels can become a reliable source of profit for advertisers and the channel itself.
Twitter will need to find its place in the consumer’s online path-to-conversion and provide consumers with engaging adverts that deliver a return for advertisers. A lot of brands seem to be taking a watching and testing stance with paid Twitter advertising, and Twitter’s challenge post-IPO will be to convert these brands into fully-fledged Twitter advertisers.
Jon Myers is VP and Managing Director EMEA of Marin Software
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