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How Twitter can re-prioritise its growth avenues

Twitter logoThe 7-year old microblogging platform Twitter got listed recently for an initial price of USD 26. Twitter’s successful initial public offering raised USD 1.8 billion. Its stock price has since been climbing, implying a market capitalisation of more than USD 24 billion.

Also, it is the second-most used social platform, globally. In terms of appeal to social media marketers and media partners, Twitter typically trumps Facebook when it comes to celebrities, discussion around live events, and breaking news. In a recent move, Twitter moved to consolidate this strength by allowing users to create custom timelines around events and television shows. This allows Twitter to disseminate user discussion data to networks in a valuable service that’s a proven ratings booster. Secondly, this captive audience offers a strong advertising opportunity to which Twitter can serve targeted ads as well.

However, although Twitter generated revenues of USD 422 million in the first three quarters of 2013, it incurred a net loss of USD 133 million. Also, as per available data, almost one million new users register daily to this platform, but the number of active Twitter users is not growing as it used to.  Research firm Peer Reach has enlisted three ways in which Twitter can re-prioritise its growth avenues.

#1. Generate revenues from non-US users
Twitter had generated revenues of USD 121 million in the second quarter of 2013, of which 75 per cent were generated in the USA. However, only a quarter from the Twitter population actually comes from the USA. It can be an efficient proposition for Twitter to generate more return on its user base in Japan, the UK or Brazil. Of the top 23 countries with more than 8,00,000 active tweeting users, 14 countries have more than 5 per cent active Twitter users. The top five countries – Saudi Arabia, Spain, Argentina, Indonesia and Venezuela are non-English speaking countries, with Saudi Arabia even having over 32 per cent active twitter users. Saudi Arabia and Indonesia are two countries known for the fact that most internet users don’t have a PC, but access the internet through mobile. Very recently, to augment growth in these regions, Twitter saw the appointment of Parry Singh as Managing Director – SEA, India and MENA.

#2. Better target mobile users 
As per Peer Reach research, Twitter users are young, averaging 24 years. The average male is 26 years old, the average female 22 years old. Teenagers dominate Twitter. Only 20 per cent of the users are older than 30. This is the population Twitter needs to target extensively and come up with a strategy to support mobile advertising, as most brands are targeting a mobile-first strategy.

#3. Improve new accounts retention 
Twitter has a stable group of active users. However, low retention for new users is the weak spot for Twitter.  Of the 90 million accounts that registered in the last 3 months, only 3 million turned into daily active tweeting users, as per the study by Peer Reach. Also, 56 per cent of these accounts haven’t placed a single tweet, while only eight per cent tweeted more than 50 times. “For new users the Twitter experience is very overwhelming. Search results are chaotic, discovery is difficult, and the trends, invented by Twitter themselves, haven’t been improved since many years. If Twitter can improve retention of new users, it should be able to get past 500 million world wide active users and the stock price will sky rocket,” summarised the report.