Twitter shares dramatically dropped by 16.3 percent on Wednesday, bringing their total drop so far this year to 36 percent. Analysts have warned that the network could face losing a significant chunk of their advertising revenue by marketers to rival social networks.
Following an announcement by Twitter that marketers had failed to increase their advertising spend at their estimated rate, shares in the social network have seen yet another drop.
A variety of other factors have contributed to causing stock to plummet close to the lowest yet, including an incredibly slow rate of user growth. It has also been evident to social media practitioners that many of their most recent updates have seemed strained, in some cases even going against the social network’s original principles in order to compete with other social networks. Now investors most primary concern is surrounding the sales of adverts by marketers.
Enough inventory – not enough demand
According to the social network’s Chief Financial Officer Anthony Noto, previous attempts to build new advertising products had been far more successful, but lately marketers had instead transferred their spend to other platforms. In a discussion with the Financial Times he explained that they had enough inventory to satisfy demand, but not enough demand.
As the capabilities of social networks continue to evolve, marketers have been left with an extensive variety of advertising options. It’s therefore unsurprising that many will be shifting their budgets around in an attempt to compete in reaching the potentially lucrative millennial audience.
Twitter Video Ads
Twitter have said that they are aiming to increase ad spend on video, thanks to the rollout of auto play – and indeed there has been significant interest in these new video ads by some potentially high-profile customers. Both video content and live video could play an integral role if the social network hopes to ever get back to where they were.
As TV viewership declines, agencies and advertisers are always on the lookout for premium video opportunities. Having recently won a deal to stream NFL games, this could be an avenue that potentially brings in a lot of revenue. However, video and live streaming is cropping up all over the Internet, and the truth is that to succeed – Twitter have their work cut out.