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Twitter leverages Video To Boost Advertising Sales

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According to the statistics by Top Charts, Twitter has over 200 million registered users with approximately 4,60,000 people joining in Twitter almost daily. On an average, there are 155 million tweets every day. Seeing these huge numbers might make us believe that Twitter is doing well. However, this is not so. There is a steep downfall in the number of Twitter users in the first three months of 2016.

Twitter has been struggling with being mainstream since years. Now this social media service turned news app may be losing its charm. Last week, Twitter missed its Jan-Feb-March revenue estimates. Well, badly! This attributed inadequacy to fat-brand advertisers not increasing their spending as promptly as expected.

Source: www.mashable.com

Source: www.mashable.com

This news was specifically unsettling for Twitter investors. Among a list of problems that include management turnover, stagnant user growth, and a hazy product strategy, heavy pocketed brand advertisers have been a reliable source of cash. The revenue growth of Twitter is expected to decrease to as low as 17% this quarter.

The reason behind this downfall might be the ‘promoted tweet’ which is a signature ad product of Twitter. This looks like a regular tweet but includes promotional links, text, and images. This is why brands are drifting away from these ads. Brands are going towards more immersive advertising like interactive ads and video ads.

Talking about the video area, YouTube owned by Alphabet Inc. holds the largest share of U.S video and dollars at 20 percent as per the statistics by eMarketer. Seeing these trends, Facebook has also started video ads three years back (in 2013), is getting up.

If we go by statistics, social network ad revenue hiked by 57% in the first quarter itself. The specific reason behind is the videos created by advertisers.

“People are sharing and creating nearly three times more video on Facebook than they were a year ago. This presents a big opportunity for marketers,” Sheryl Sandberg, Operating Chief, Facebook.

This is the reason, Twitter is going after videos to earn some money. They launched video ads in 2015 that start rolling while muted as users scroll down their timelines. As per Twitter, the advertisers are looking forward to Twitter to roll out improved tools to target users and measure performance. These tools are expected to be released this year.

Most probably, Twitter expects to release these tools in the fall when live-streaming of 10 National Football League games will begin. As per the new NFL deal, Twitter will get 15 ad slots to sell commercials during each game. Recently, Twitter said it already signed up one massive marketer to advertise during the live-stream. As of now, there are many agencies and advertisers who are looking elsewhere to invest their video dollars.

“Twitter is not yet at the forefront of the video content conversation and that is where the dollars are”, Shelby Saville, President of innovation and investment platforms, Mediavest Spark

Additionally, she pointed out to Facebook, Snapchat, and obviously YouTube, where advertisers are investing their money for video ads. Twitter tight-lipped and refused to comment beyond the statements released by the company about their earnings results.

Putting efforts into the video is crucial for Twitter, especially when they are losing their investors. According to eMarketer, U.S is expected to grow 28.5% in the year 2016. This will account to a hike of $9.84 billion. However, Twitter faces tough competition in the race of video ad dollars as most of the media companies, social media platforms, and publishers are shooting for those dollars.

One of the incidents where Twitter failed to engage its users is when Coldwell Banker Real Estate LLC bought Twitter’s promoted tweets and video ads in the year 2015. It failed to engage the users in terms of view, comment, or share. These ads did not justify the cost of the marketing efforts as per Sean Blakenship, Coldwell’s chief marketing officer. The performance of Facebook’s video ads performed way better than the Twitter spots. This is the reason marketers are ready to pay more for Facebook’s ads in exchange for access to the company’s 1.65 billion users and better as well as a reliable set of measurement and targeting options.

As per AdParlor, ads on Facebook cost an average of $5.25 per 1,000 impressions in the U.S., compared with $4.78 on Twitter and $3.36 on Facebook’s Instagram in the first quarter. However, some marketers are showing positivity towards Twitter. They are seeing their investment in advertising on the Twitter platform to pay off and are expecting to spend even more on this platform in the year 2016.

“We’re getting tremendous engagement there, and for us we have yet to see a competitor for Twitter in the area of making connections during cultural moments,” Lou Paskalis, senior vice president and enterprise media executive, Bank of America Corp.

Well, there is a bad news along with this. There are instances where big advertisers on Twitter have pulled back their money on its traditional ads. One of them is the case of beer maker Heineken NV. They are frequent advertisers on Twitter and has successfully leveraged the platform’s promoted tweets as well as short video ads in order to boost their marketing efforts. Still, the brewer is planning to spend slightly less on Twitter this year as compared to what they spent last year.

“You don’t want to tweet everything. We are experimenting a bit less and waiting for video” Ron Amram, vice president of media for Heineken USA.

Conclusion

There is no doubt that 2016 is the year of online video ads. Twitter’s move towards video ads in order to boost their advertisement sales might be a turning point for them. Being an advertiser, have you ever leveraged upon Twitter as an advertising platform? Being a Twitter user, do promoted tweets look interesting to you? Share with us your views!

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