I know many of you love Twitter, so do I! Twitter has been my favourite social media network for personal use and up until recently it was my favourite promotional and marketing tool online so I hate writing bad things about a platform I really once enjoyed to use. However, every quarter the decline continues and I talk about it because I want people who have heavily invested in Twitter to realise just how bad things really are.
Worst Quarterly Revenue Growth Ever
Yesterday Twitter posted its worst quarterly revenue growth ever since IPO. The second quarter earnings saw Twitter fall short of expectations with a $107 million net loss on $602 million in sales. In after-trading hours yesterday, shares tumbled 10%. It has become routine by now, investors enter with modest expectations, Twitter manages to miss the lowered bar that has been set anyway and then the shares tumble afterwards.
Twitter has also warned that the demand from advertisers is softer than expected at the moment so the outlook is hurt for the third quarter later this year. User growth is still struggling, Twitter managed to add 3 million net new users in the second quarter – nothing to celebrate at all.
Since Jack returned last year Twitter has added just 9 million users and just 1 million users in the U.S.
In the same timeframe Facebook added 164 million monthly users. In a letter to shareholders, Twitter openly admitted what the problem is and it is a problem many of us are familiar with. Compared to advertising on Facebook and Snapchat, Twitter is simply too expensive.
“First, there is increased competition for social marketing budgets, We’re still priced at a premium CPE [cost per engagement] relative to others.”
Twitter also said that they would be placing more of a focus on mobile video. It makes sense given the rise of video content but the problem they face at the moment is that Snapchat and Facebook have been taking big strides in this area already.
The big dilemma is this: CEO Jack Dorsey has been in charge of Twitter for a year and the growth problem is still a problem. They have missed revenue estimates for the last two quarters and already they are lowering expectations for the next quarterly report.
What Direction Does Twitter Move In Now?
What can Jack Dorsey and his team do to make Twitter relevant again. Well if you read the quotes you will only see things from Jack such as, “we are confident in our product roadmap” which is all well and good and it makes sense for him to say that as he tries to inspire confidence in shareholders and users.
Yesterday it was noted that Twitter is going to make big pushes towards video content which makes sense in the current environment, but even if they do that they are still struggling to define their role in the social landscape.
Twitter is no longer categorised as a social media app in the App Store, it is now a News app which represents a shift in thinking. A new marketing campaign has also launched which presents Twitter as a way to find out “what’s happening in the world.”
So Twitter wants to be a powerhouse for live breaking news which distributes information fast. That is what Twitter is good at doing, but how can they turn that into something which more people want to use? Twitter has become a bit of a chore and as quarters continue to show a decline, companies may soon start looking at investing their time on other social platforms.
What Should You Do?
What does all this mean for the average Joe? By no means should you drop Twitter, it is still an important service and an important tool. However, by the same token, nobody should be playing on solely Twitter and nothing else, especially people who brand themselves as social media marketers.
A few years ago, when Twitter was really rocking, people were able to create businesses where they were Twitter advisors to companies and offered to run Twitter accounts for companies which is awesome. It is a great example of seeing a business opportunity, grabbing it and really making it work. For some people, it was life changing and of course when you experience something life changing you become romantic about it and don’t want it to go away.
Now I am by no means saying that Twitter is going to vanish any time soon but if you are a digital guru and you are pushing the Twitter end of your business hard but you don’t play in the other platforms then you are going to find things will get extremely tough should the earnings reports continue like this. If you have built your business around the Twitter platform you have the risk of if Twitter closes down or vanishes into the abyss like MySpace then you too are also out of business.
Think about other platforms that may also be of use to you such as Facebook, Instagram, Musical.ly, Snapchat…whatever it may be. Think about how you may be able to build a profile on there too. Every quarter we see the same trend and it tells us the same thing every quarter, Twitter’s problems are very real.
As much as I love Twitter, lets say it shut down next week. I would be sad to hear it but the reality is I just move focus to the other platforms I am on instead. That is why you need to work on a presence across multiple platforms. Given how the quarterly reports go now at Twitter, branding yourself as a “Twitter Guru” or a “Twitter Consultant” could be quite a risky business.