Twitter’s aspiration to rejuvenate its business extends beyond just digital advertising, as it eyes the expansive horizons of video, creator, and commerce collaborations.
However, the grandeur of this vision might not match up to the reality on the ground, raising questions about the platform’s true potential.
Twitter’s reliance on digital advertising
Linda Yaccarino, the newly appointed CEO who took the helm on June 5, has been initiating preliminary talks with influencers from the entertainment and political circles, payment services, and media publishers to establish potential alliances.
This move comes amid an internal upheaval after Elon Musk’s acquisition of Twitter in October, leading to thousands of layoffs, lax content moderation, and consequently, the departure of several advertisers wary of their promotional content sharing space with unsuitable material.
Twitter, having recently rebranded as X Corp, under Musk’s vision for a “super app” akin to China’s WeChat, is seeking “money transmitter licenses” in all 50 U.S. states.
However, despite these ambitious plans, it appears that digital ads continue to hold pivotal importance for Twitter, signified by Yaccarino’s appointment, a veteran advertising executive recognized for modernizing ad sales at NBCUniversal, a part of the Comcast-owned conglomerate.
Post-acquisition rebound
The post-acquisition turbulence led to some ad-buying firms suggesting their clients suspend advertising on Twitter. Interestingly, these recommendations have since been withdrawn, and no significant advertising companies are currently advocating for a hiatus.
This shift has enabled popular brands such as Warner Bros, Mondelez, McDonald’s, and Walmart to reinstate advertising on Twitter after brief intermissions.
Yaccarino shared with investors that ad spending in several sectors, including health, consumer packaged goods, and financial services, has surged by at least 40% year-over-year.
Twitter is making strides in expanding video content on the platform, with vertical video now claiming more than 10% of the time spent on Twitter. An example of this initiative is the recently launched show, “Tucker on Twitter,” hosted by ex-Fox News presenter Tucker Carlson.
Twitter envisages generating revenue by selling ads and sponsorships alongside videos from Carlson and other creators.
However, it’s essential to remember that these are early days for these partnerships, and the true impact of these efforts remains to be seen.
Moreover, this focus on creator and video content is not unique to Twitter and is a well-trodden path in the social media world, making Twitter’s transformation strategy less impressive than it initially appears.
Musk’s support for Yaccarino’s ideas and their apparent positive working relationship give some hope for the future.
But the jury is still out on whether Twitter’s transformation strategy can impress the market and whether these partnerships will lead to a long-term, sustainable model of success for the platform.
