Twitter aims to diversify beyond advertising, but can it be done? – News

The advertising situation on Twitter has been particularly dire since Musk took over the company in late October

AFP files

By the AFP

Published: Fri Nov 25, 2022, 10:08pm

Is it a pipe dream or a possibility? Elon Musk wants to diversify Twitter’s revenue stream beyond advertising, a feat none of the biggest social networks have yet achieved.

Something of a gold standard, social media ads can be refined and tailored to individual users at scale, and have been particularly profitable for Meta’s Facebook and Instagram, as well as Google.

“Facebook has pretty much set the standard for having an advertising model for social networks,” said Jasmine Enberg, analyst at Insider Intelligence. “But that doesn’t necessarily have to be how social platforms monetize.”

Social networks are facing budget cuts from inflation-plagued advertisers and increased regulations around the use of lucrative personal data, so it makes sense for them to “explore new non-ad monetization techniques,” he said.

The issue is delicate for Twitter, whose turnover depends 90 percent on advertising. Advertisers, on the other hand, don’t necessarily need Twitter and can turn to other social networks.

The advertising situation on Twitter has been particularly dire since Musk took over the company in late October.

In recent weeks, half of Twitter’s top 100 advertisers have announced they are suspending or have otherwise “apparently stopped advertising on Twitter,” found an analysis by nonprofit watchdog group Media Matters.


They fear being associated with toxic content as Musk, who describes himself as a “free speech absolutist,” advocates more relaxed restraint.

Social media sites are testing two workarounds in particular: charging everyday users and charging content creators.

Forum platform Reddit has implemented a hybrid model, making money through advertising, paid memberships, and digital coins that allow users to access special privileges.

That said, “It’s always hard to charge for something that used to be free,” said Carolina Milanesi of research firm Creative Strategies.

“Unless you give something different or create a different product, you can’t go from not refilling to refilling,” he said.

While Twitter has been offering a paid subscription with added features since last year, Musk aimed to raise the price to $8 a month and include account verification in the plan’s benefits.

However, a partial rollout was chaotic and resulted in the proliferation of so many fake accounts that the rollout of so-called Twitter Blue was put on hold.

“Looking for a way to charge users for premium features and make money off users is not a bad idea,” Enberg said.

But he said the benefits Twitter offered may not have been appealing enough, and that the verification aspect should be more of a security feature than a monetizable feature.

Finally, because paid subscribers — arguably the most active on the network — would see 50% less advertising than non-paying users, the plan would “dilute the quality and size of targetable audiences for advertisers.”

Some newer platforms are trying to do without advertising, with no guarantee of long-term viability.

For example, on Discord, a live discussion social network, subscribers have access to more emoticons.

And on fledgling photo-sharing app BeReal, users can escape the ads with in-app purchases for extra features, according to the Financial Times.

Twitter had about 230 million daily active users in June, and Musk continues to congratulate himself on increasing that number since taking over.

But the increase in users doesn’t necessarily translate into dollars.

Snapchat, which also launched a paid version in June, has been gaining more and more users, but not necessarily money.

Faced with this reality, platforms compete for content creators to attract and retain audiences, by taking commissions or charging them for promoting their messages and videos.

This represents “a huge opportunity” for Twitter, Enberg said.

Twitter “has a lot of celebrities and well-known influencers, politicians and journalists” with whom it could form a financially mutually beneficial relationship, he said.

Milanesi added that while the network already offers some promotional tools, they are “quite expensive and not very effective”.

Leave a Comment

%d bloggers like this: