What if Twitter isn’t an effective marketing platform?

Twitter in troubleOn Wednesday May 6, it was reported in the Wall Street Journal that Twitter’s CFO Anthony Noto has also been named CMO of the company.

From the article in Wednesday’s WSJ:

“The changes also come as Twitter’s management, led by Chief Executive Dick Costolo,has come under fire from investors after missing revenue estimates last month. Mr. Noto ascribed the first-quarter shortfall to a “demand issue” with its advertising products that resemble tweets and allow users click on them and take an action, such as downloading an app or watching a video. Twitter’s stock has fallen 28% to $37.42 since the day before that earnings report.

This news should be taken in the context that Twitter remains unprofitable and according to a Motley Fool article from last month is being asked the question – will Twitter ever be profitable?

I was guest-lecturing at a marketing course at FIT last week and mentioned that Twitter founders Evan Williams, Biz Stone, Jack Dorsey, and Noah Glass when they conjured up Twitter way back in the mid 2000’s (it launched in 2008) they probably figured that they had an interesting new communication tool, they’d build audience through utility and usage and then figure out to monetize that audience later. Classic Silicon Valley. The trouble is that more than 7 years later Twitter is still seeking a long-term revenue model. It was thought to be advertising but that has become a much bigger struggle than it might have been.

One of my business partners posited that Mr. Noto who came to Twitter by way of Goldman-Sachs, is holding the CMO position to highlight that marketing at Twitter has to be accountable in terms of positive revenue and ROI for its clients. That’s nice window dressing but what still remains is that users need to consume Twitter-promoted deals (i.e. BUY STUFF) and up until this point it’s just not happening at a great enough rate.

I likened it to the now defunct Napster, which at one point had 30 million ‘users’ but that’s all they were since they did not spend any money! So they were not customers, they were users – in the truest sense of the word.

Twitter applications Vine and Periscope (which was in the news over the weekend vis a vis Periscope’s streaming of the Mayweather-Pacquiao bout (which was the $100 Pay-per-view but free for those that were able to stream off Periscope), are making money – so it’s not all doom and gloom, and as the Motley Fool article presumes,

“As long as it continues making progress toward these opportunities, Twitter should turn a profit for its shareholders fairly soon. While it might not be as lucrative as Facebook, the potential revenue and earnings growth at this point account for the high valuation. At the same time, the uncertainty surrounding the execution of these initiatives will also result in significant volatility.”

I am more than a bit dubious about that notion. The jury is not yet in but Twitter users are proving difficult to move to being customers of sponsored (and non-sponsored) brands and marketing efforts. Changing that behavior is not becoming easier with the continued expansion of new platforms and useful tools.

So what if Twitter simply is not an effective marketing platform? What then?

About markkolier

Futurist, entrepreneur, left lane driver, baseball lover
This entry was posted in Digital media, Social Media and tagged , , , , , , , , , . Bookmark the permalink.

1 Response to What if Twitter isn’t an effective marketing platform?

  1. Pingback: Millions of users don’t a customer make, nor a profit, or even a business… | The Malcolm Auld Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.