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    April 30, 2015

    Twitter is still losing money, even with 300 million users

    In the world of social media it is certainly difficult to stand out these days and very few have become successful and carved out a niche market for themselves. Twitter is hardly a company we would expect to need a niche to survive as it has been around for ages ““ 9 years this past March. That being said, Twitter is still not making money, even with 300 million active users as of Q1 in 2015.

    In its latest earnings report, Twitter announced that it has reached 302 million active users which is an 18 percent year-on-year (and a 5 percent quarter-on-quarter increase) increase. Their revenues have also grown significantly, up 74 percent from a year ago to $436 million. This didn‘t translate into any profits, though, as the company still posted a net loss of $132 million in the first quarter of 2015.

    Twitter has been investing heavily in video over the last 12 months, with offerings like Vine and Periscope already in its stable. They are also improving their advertising efforts. They acquired TellApart, which is a marketing tech firm that previously helper Facebook‘s advertising department. Also, they have formed a partnership with Google‘s DoubleClick platform which will offer more precise advertising performance metrics to marketers.

    With cash hungry investors breathing down their necks it will be interesting to see how Twitter responds in the next 12 months.

    Source: Twitter

    Follow Theunis on Twitter: @Theunis_BWB

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    • Nick Paul

      Honestly the fix is pretty simple.

      As someone who works on multiple social networks with multiple advertising platforms I find that Twitter just isn’t competitive. Ads are obviously where these networks make their money. Compared to Facebook ads, Twitter’s ads are outrageously expensive (often 10x more expensive than the same ad on Facebook) and just not targeted enough in general to be valuable to the SMEs in multiple countries. To date I think Twitter only allows geotargeting in 6 countries worldwide, it also only allows billing in those 6 countries (SA included). So anyone outside those countries will have a hard time sending any money Twitter’s way, except through a marketing partner agency with a presence in one of the 6 countries – who will obviously take a commission too.

      Twitter’s support is notoriously sluggish and unhelpful too. Their turnaround time on fixing bugs in their advertising platform (you know, that thing which makes them money) can be months in my experience.

      There are just so many reasons not to do Twitter ads and so few to do them that it’s no wonder they can’t get the money through the door.

      Solution? Accept payments via credit card from any user in any location who wants to promote tweets or grow their followers. Bill and debit the cards daily to minimise losses due to fraud (they currently bill after a few days only). Beef up that geotargeting in other countries. Twitter has to remember, like Facebook so excellently did, that America is not where your money’s at, it’s only part of the puzzle. Twitter’s users are all over the developing world and if they don’t capitalise on that, they can only expect to continue losing cash.