Published by Darren Moore on November 23, 2016
These are worrying times for Twitter. The company’s losses topped $100 million in the second quarter of this year, revenue growth shrank for the eighth successive quarter to less than 20% and Twitter’s stock price has slumped 33% since the beginning of October.
The collapse in stock price was partly down to the decision by Salesforce Inc to withdraw from a prospective merger. In announcing their decision, Salesforce Chief Executive Marc Benioff described Twitter as an ‘unpolished jewel’, a veiled criticism of CEO Jack Dorsey, and a warning to other potential suitors. Walt Disney and Alphabet Inc – the parent company of Google – have also failed to follow through with bids for the company after initially showing some interest.
The cloud of negativity surrounding Twitter is likely to make it harder to attract investors, all of which increases the pressure on Dorsey, who is yet to find a way to revive the company’s growth and boost advertising revenue. Dorsey is likely to have to make staffing cuts or sell off parts of the company over the coming months to ensure its survival.
So with Twitter hitting the financial buffers, should businesses switch their marketing focus elsewhere? The answer to that question is, almost certainly, no.
The company may be struggling but it’s worth taking a step back and remembering that it remains one of the top social media platforms in the world. It added 1% more users in the second quarter of 2016, and can boast an impressive 310,000,000 unique monthly visitors, making it the third largest social network on the planet. What concerns analysts and potential suitors is the slowing rate of growth, but this isn’t necessarily of concern for businesses.
Twitter not only retains a healthy chunk of the social media market, it also continues to excel in certain areas, such as branding.
All brands understand that it is vital to reach potential customers in a natural way, in their own social media environment. Although advertising via its ad platform is more expensive than with some of its rivals, Twitter adverts have more impact. There are relatively few advertisers on the platform and as users are not bombarded with ads, they tend to respond more positively to brands they are introduced to.
Twitter also does better than its social media rivals at incorporating advertising seamlessly into user feeds, as well as offering alternatives to the simple promoted tweet, such as website cards. Being less obtrusive and giving brands more options in terms of marketing devices also helps produce a more positive reaction from potential customers and in a social media environment where advertising is continually encroaching on users’ space, this is an increasingly significant factor in Twitter’s favour.
Another area where Twitter continues to perform strongly is with influencers. Word of mouth marketing from social media stars is of growing importance, and Twitter’s approach is to cut out the middleman. The company deals with influential bloggers and social media users directly, a strategy demonstrated by its purchase of a well-known social media talent agency.
Combined with this close relationship with influencers is Twitter’s open door policy when it comes to its API, allowing brands to use various tools to identify the most relevant influencers in their potential markets and devise campaigns to target them. For brands looking to tap into the power of social media influencers, Twitter remains the best option.
The final area in which Twitter continues to perform strongly is as a customer service platform. While targeting a high profile influencer to spread your company’s positive message can quickly help to create a good impression, offering bad customer service can have the opposite effect, but Twitter offers an opportunity for companies to improve their image and build customer retention and loyalty through direct customer service response.
A recent study of customer service interactions on the platform showed that, although around 70% of such queries are not answered, when a company does respond via Twitter, customers respond positively. In fact, the study showed that 83% of people who made a complaint on Twitter were very happy to get a reply when the company responded, and an impressive 40% will switch to another brand if it has earned a reputation for good customer service, all of which indicates that Twitter offers a unique and profitable way for brands to speak to their customers directly.
So despite their current financial difficulties, Twitter remains a potent platform, offering brands the potential to develop a high quality, direct relationship with potential audiences.