Twitter struggling to make money from global users

by CXOtoday News Desk    Nov 04, 2013

social media users

Consider these statistics: 77% of Twitter’s monthly active users were outside the United States in the last quarter, however, only 26% revenue was generated from international advertisers.

“The problem is, Twitter is still figuring out how to make money from those users abroad… If revenue from its international operations do not increase, the company has said its business will soon suffer,” says a NYT report.

According to research firm eMarketer, Twitter is expected to grab just 0.5 percent, or $580 million, of the total spending on worldwide digital advertising this year. In comparison, Facebook is estimated to get about $6.4 billion.

Market experts say that increasing popularity of smart devices and mobiles should work in the favor of Twitter. From the very beginning, Twitter has been more apt for the mobile, unlike rivals like Facebook and Google that had to customize their offerings. But so far, Twitter has not been able to optimally tap this opportunity.

Opportunities in developing markets

It seems that Twitter is finding it tough to leverage on its popularity outside the US. Despite its increasing usage in emerging markets such as India and Brazil, Twitter has not been able to persuade local marketers to spend on advertising.

According to the NYT report, many consumers in these developing markets still use so-called feature phones, or low-cost handsets that do not provide the same social media experiences as high-end smartphones offered by the likes of Apple and Samsung.

“Often, these users do not have the same access to high-speed cellphone networks as their counterparts in Western markets, so they have yet to respond to the same advertising techniques, like promoted messages from brands that Twitter has introduced in the United States and Europe,” says the report.

Advertising impact still unclear

Marketers in the US have been quicker and more receptive in their uptake of advertising opportunities on the Social Media. Companies in developing markets, on the other hand, have been cautious in their approach. Despite its growing popularity, advertisers are still unsure of the business impact or RoI.

 “Twitter is not quite there yet,” Oliver Eriksson, head of strategy at a digital ad agency VML, was quoted as saying. “They need to do it quickly to give brands confidence that Twitter can add value.”

Many of the bigger companies like Nestle and Unilever are planning to increase their focus on Social Media to connect better with their kind of consumers. However, Twitter has to be able to give a clear roadmap on how it can help them reach out. Otherwise, these companies may not entrust the internet giant with very large investments.