Although Twitter makes it easy for retailers like Bonobos to serve ads to targeted customers, how effective those ads are is still up to debate.
While sharing an email address over a social media network with a brand is one thing, purchasing from it is a different thing. And that’s a distinction that has retailers and advertisers wondering if Twitter is worth it.
Is Twitter Worth It For Retailers, Advertisers?
Clothing retailer Bonobos, for example, has cut down significantly on the amount of money it’s spending on Twitter.
“Twitter is still in the process of proving out return-on-investment. We’re continuing to test,” said Craig Elbert, Bonobos’s vice president of marketing.
Their concerns reflect what a lot of retailers are experiencing with Twitter’s platform. Although there’s a potential to reach a lot of people – the social network has 302 million monthly active users – however, they aren’t entirely convinced that the ads will offer real world business results. It makes it very hard for marketers to justify costs when there’s little evidence to show that this level of exposure is leading to measurable sales.
So, What’s The Deal With Twitter Now?
Twitter’s first quarter results reflect the trepidation. Their reported revenue and current quarter outlook for 2015 were lower than expected. Wall Street responded with a 25% drop in Twitter’s shares early in the second quarter of this year. The social marketing company attributed their revenue performance to a “demand problem” for its direct response ads. These ads are served to users who take specific actions, such as installing an app, clicking a link to a website and following a specific account.
According to Twitter, direct response ads like these help encourage advertisers to spend on the platform – but was also responsible for revenue shortfall in the last quarter. Instead of other “engagement” actions like retweets and favorites, these direct response ads give advertisers the option to pay for specific outcomes.
However, many are unsure if Twitter’s platform is worth the cost compared to Facebook and Google’s advertising products, which are easier to measure. Without ongoing use from advertisers, Twitter may need to rethink their program yet again.