Twitter - changing the world, but not pulling in the users
- Summary:
- User growth has stalled over at Twitter and Wall Street's not happy, even if CEO Jack Dorsey is big on the world-changing powers of his tech.
When amazing things happen in the world we see them right on Twitter, Periscope and on Vine. Last several months were no exception. With a single tweet in August, Germany's immigration office sent a message about their acceptance of refugees that reverberated throughout Syria and the Middle East. It create a wave of migration that was documented for all the world to see, live.
Maybe so, Jack Dorsey, maybe so. But Wall Street’s more interested in the more pragmatic question of user numbers and there things are slowing down, no doubt about it.
Twitter now has 320 million monthly active users, up just four million over the last quarter - and Wall Street’s not happy about it.
In particular the headline breakout that US user numbers - the presumed adverising happy hunting ground - have remained static all year seems to have caught investor attention as the Twitter share price tumbled 12% yesterday when the firm announced third quarter numbers.
Those show a loss of $132 million on revenues of to $569.2 million, up year-on-year from $361.3 million. But it’s the user numbers that CEO Dorsey found himself having to explain away as he again outlined his turnaround strategy for the firm:
Our focus is on three things, a more disciplined execution, simplifying our services and better communicating our value. We have made meaningful progress across all three. We simplified our roadmap around a few big breaths across Twitter, Periscope and Vine that we believe represent our largest opportunities, assigned leads for each major project initiative and fully staffed those teams.
He played up simplification as a key driver for change:
Twitter is getting easier to use every single week with a steady increase of launches.
Moments is the simplest way to see what's happening in the world, all organized by topic. It’s early and we're still collecting feedback, but we've already seen how Moments improved Twitter.
Our focus with Moments now is making them easier to discover, getting people into them right when they open Twitter and rolling out curation globally beyond the United States.
He explained:
Moments represents a real fundamental shift in our thinking and the reason why is a lot of Twitter is organized by a reverse chronological timeline. We make people do a bunch of work to find the right accounts to follow and then they actually see the world through those accounts.
What Moments does is you can open it up, you can actually see everything that’s happened in the world, that’s most meaningful, it's organized by topics, so you see topics first. You tap in to each one of those Moments and you can actually see really unique insight and commentary on the particular event that you’re interested in.
So it questions the reverse chronological timeline, provides a chronological narrative, a complete story that is human-curated, so it gives you much deeper insight. At the same time you don’t have to do any of the work to find and follow accounts, you’re actually following topics and you can actually follow topics as well and you can follow them live.
See it as one source, one conversation piece that makes all of Twitter better and that’s just one initiative around making Twitter to easier to understand, there will be many, many more to come over the year.
He added:
Moments is just the start of bolder simplification efforts you will see on Twitter. I’ve challenged our teams to look beyond assumptions about what makes Twitter the best play to share what's happening. I'm confident our ideals will result in the service that’s far easier to understand and much more powerful.
Advertising
Twitter is also taking that simplicity message to traditional marketing platforms with a new TV ad that will play during the World Series (so confined to the US version of the world then).
For its own advertising revenue purposes, Chief Operating Officer Adam Bain says volume of video consumption on Twitter has grown dramatically over the last six months, with native video views up 150x across Twitter, Periscope and Vine:
The entire ad industry has been engaged in a dialogue about high-quality video views, something that's lacking on most ad platforms.
In response we introduced the highest viewability standard in the industry only charging once an ad is 100% in view for at least three seconds. After introducing auto-play video marketer saw an 84% decrease in the cost per video views on Twitter.
Additionally, our marketers saw a 7x increase in the amount of video completion. So people aren’t just watching more video on Twitter, they're finding the content so compelling that they are watching the video all the way through to the end.
Next up, for US advertisers, will be Promoted Moments, a pilot offering to a select few for the time being:
It’s designed to be a great platform for marketers to tell their stories, especially video centric narratives.
Last weekend we launched the first Promoted Moments with MGM, Warner Bros. in partnership with their agency OMD for the movie Creed, where the studio was able to generate awareness and anticipation of the film by curating videos and tweets in a really compelling campaign.
For Q4, our goal with Promoted Moments will be to learn alongside marketers. Demand is strong, so we will be deliberate in our approach, with a limited series of Promoted Moments optimized for quality consumer experience above all else. To be clear as we task consumers will not see a Promoted Moments everyday.
Twitter will also shortly kick off a partnership with DoubleClick which Bain says will address some important challenges:
One, many third-party measurement systems were built back in the desktop era and have not accurately measured mobile inept activity. It is important as almost 90% of our revenue comes from mobile.
And two, existing measurement systems don't account for the powerful engagement actions on the tweet, actions like a retweet or follow and the corresponding impact on downstream conversion. Marketers know there's a link and they want to see it.
A focus on growing advertisers is essential, says Dorsey:
Within the direct sales organization (DSO) channel, we have an international business and the US business. The US DSO business has historically been driven by two factors; the growth in advertisers and the growth in spend per advertiser.
We’re seeing less growth in advertisers now than we have been in the past given this tremendous penetration that we’ve driven and the primary growth driver of the US DSO business is now average revenue per advertiser.
For Dorsey, now settled back in the CEO hot seat, it’s a time of challenge and a time for some different thinking. He concludes:
On the roadmap going forward, we have a number of iterations that continue to make Twitter easier to understand and make it far more approachable than has been in the past. And then we’re also looking at some more bold rethinking and some more bold experiences that really speak to some patterns that we've seen on Twitter from day one.
We do think that the platform, the network aspect of our service, is fundamental to both us and to the world.
My take
A UK politician taunted a recent Prime Minister with the jibe: You were the future once.
It’s not diffficult to imagine one-time and now-again CEO Dorsey flinching from the same accusation.
It might be an idea to stop pitching the world-changing aspects of Twitter and drill down on pulling in some advertising bucks.