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Twitter aims to diversify beyond advertising, but is it doable?


The advertising situation at Twitter has been especially bad since Elon Musk took over at the end of October 2022

The advertising situation at Twitter has been particularly bad since Elon Musk took over the company in late October 2022.

Is it a distant dream or a possibility? Elon Musk wants to diversify Twitter’s revenue streams beyond advertising, a feat that has not yet been achieved by the largest social network.

As the gold standard, social media advertising can be fine-tuned and tailored to individual users at scale and is particularly lucrative for Meta’s Facebook and Instagram, as well as Google.

“Facebook has set quite a few standards for an advertising model for social networks,” said Jasmine Enberg, an analyst at Insider Intelligence. “But that’s not necessarily the way social platform earn money.”

Social networks are facing Cut budget from advertisers affected by inflation and increased regulations on the lucrative use of personal data, so it makes sense for them to “explore new, non-advertising monetization techniques” , she said.

The issue is delicate for Twitter, whose revenue is 90% dependent on advertising. On the other hand, advertisers don’t necessarily need Twitter and can turn to other social networks.

The advertising situation at 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 that they are pausing or “apparently stopping advertising on Twitter,” an analysis conducted by the nonprofit monitoring group. Media Matters returns show.

They fear being associated with malicious content because Musk, who describes himself as a “free-speech autocrat,” advocates for looser censorship.

alternative solution

Social networking sites are specifically testing two alternatives: charging the user daily and charging content creator.

Forum platform Reddit has implemented a hybrid model, monetization through advertising, paid subscriptions, and digital currency that gives users access to perks.

“It’s hard to charge for something that was once free,” says Carolina Milanesi of research firm Creative Strategies.

“Unless you come up with something different or create a different product, you can’t go from no charge to charge,” she says.

While Twitter has offered a paid subscription with extra features since last year, Musk has aimed to raise the price to $8 a month and include account verification in the perks of the plan.

However, the partial launch was chaotic and led to the proliferation of so many fake accounts that the rollout of the so-called Twitter Blue has now been halted.

“Finding out how to charge users for premium features and monetize users is not a bad idea,” says Enberg.

But she says the benefits Twitter offers may not be compelling enough, and that the verification aspect should be more of a security feature than a monetization feature.

Finally, since paid subscribers—arguably the most active on the network—will see 50% less ads than non-paying users, this plan will “decrease the quality and size of the addressable audience for advertisers.”

Some newer platforms are trying to do without advertisement completely, does not guarantee long-term viability.

For example, on Discord, the live discussion social network, subscribers have access to more emojis.

And on the fledgling photo-sharing app BeReal, users can get rid of ads with an in-app purchase for more features, according to the Financial Times.

‘Major influencers’

As of June, Twitter has about 230 million daily active users, and Musk continues to congratulate himself for growing that number since taking over.

But increased users don’t necessarily translate into dollars.

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

Faced with this reality, platforms are vying for content creators to attract and retain audiences—while taking commissions or making them pay for promoting their messages and videos. surname.

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

She said that Twitter “is teeming with celebrities and big influencers, politicians and journalists” with whom they can form mutually beneficial relationships financially.

Milanesi added that while network offered a number of promotional tools, which were “quite expensive and not very effective.”

© 2022 AFP

quote: Twitter aims to diversify beyond advertising, but is it doable? (2022, Nov 25) get November 25, 2022 from https://techxplore.com/news/2022-11-twitter-aims-diversify-advertising.html

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