User growth slows, but Twitter’s ad revenues are growing rapidly
Twitter showed in 2013 that its ad business is growing fast. Even as user growth slowed dramatically, ad revenues and ad engagement metrics ticked up.
Advertisers cite three reasons why they’re increasing spending on Twitter: The social network’s tie-ins with TV, its real-time nature and its willingness to partner closely on creative executions.
Other developments that will drive growth this year include improved analytics, more ad offerings for international markets and additional ad products in the direct-response and ecommerce areas.
Twitter spent much of 2013 solidifying its connections with TV. It launched a new ratings business with Nielsen to measure TV-related conversations on Twitter; created new video ad opportunities with Amplify; and bolstered its association with high-profile TV events such as the Super Bowl, Grammys and Oscars.
Twitter’s linkups with television are beneficial to both the TV industry and the social network. TV executives know that many people multitask on mobile devices while watching TV. On-air mentions of Twitter drive conversation about what’s on TV and help keep viewers focused on the television.
In December 2013 polling by RBC and Advertising Age, 22% of US advertising professionals said they’d bought Twitter ads in conjunction with a TV ad campaign. Considering that programs such as Amplify are less than a year old, this constitutes positive momentum.
Advertisers that buy sponsorship packages for sports or other large-scale televised events are starting to see Twitter ads as an integral part of their overall media plan. However, there’s a caveat to looking at Twitter as a parallel to TV. Advertisers can reach an engaged audience on Twitter, but that audience by no means rivals the size or demographic makeup of the audience watching a TV program. Advertisers, then, must put engagement before reach when they sync up their TV advertising with ads on Twitter.
Twitter is focused on improving its connections with TV, and it has been bolstering its case with TV advertisers with a series of studies. Among the findings:
Source: eMarketer, March 28, 2014
Tango Media Management