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Will Twitter go as ad crazy as Facebook after its IPO?


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#1 +V-Tech

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Posted 13 September 2013 - 13:10

twitter-sign.jpg?w=618

 

Facebook has discovered that pushing ads aggressively on its users works well, even if people complain about the strategy. After Twitter goes public, it will face intense pressure to match Facebook’s phenomenal recent ad revenue growth. In the autumn of 2012, it seemed as though Facebook’s star-crossed IPO was going to ice Twitter’s plans to go public for years to come. Facebook’s share price plunged by 50% following its listing in May 2012. But over the past two months, Facebook’s strong Q2 ad revenue growth has driven investors wild — Facebook’s share price has rocketed from $22 to $45 since early July. This may well have lured Twitter into pulling the trigger on its own IPO plans now that sentiment surrounding the mobile ad market is so optimistic.
 
What’s interesting about Facebook’s average revenue per user (ARPU) growth is that it had stalled badly around the time the company went public, dipping to just 2% on an annualized basis in the spring of 2012. But by the spring of 2013, Facebook’s ARPU growth rate exploded to 25%. This was a combination of mobile usage growth and Facebook’s aggressive new ad strategies across all platforms. Most Facebook users know exactly how pushy Facebook ads have recently become — the news feed is now cluttered with messages from brands your friends have liked, many of them masquerading as genuine updates.
 
There has been much grumbling about Facebook’s aggressive ads, but the strategy has worked like a charm. New user growth has slowed down, but the company is now able to squeeze more and more ad dollars from the users it has. The big question is whether Twitter is now heading down the same path.
 
Companies that go public come under intense pressure to deliver strong earnings growth. Facebook and Twitter have very similar profiles; they will become each other’s benchmarks. Twitter investors will demand that the company match Facebook’s dazzling ARPU growth. That may well mean finding a way to expose Twitter users to a rapidly growing barrage of ads.

 

 

 



#2 Growled

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Posted 13 September 2013 - 19:06


There has been much grumbling about Facebook’s aggressive ads, but the strategy has worked like a charm. New user growth has slowed down, but the company is now able to squeeze more and more ad dollars from the users it has. 

 

There is no guarantee that old users won't get fed up with things and move on either. I have, mostly, as I do still visit Facebook but not every day.



#3 blade1269

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Posted 13 September 2013 - 20:25

Am I the only one that thinks that twitter, is kinda dumb!

#4 Sszecret

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Posted 13 September 2013 - 20:34

Am I the only one that thinks that twitter, is kinda dumb!

 

Twitter is only as dumb as you make it. You follow the accounts you're interested in, and that's it. It's actually quite nice.

 

 As far as ads go...I don't mind the inline ones (although I haven't seen any in a while), but if they plaster ads everywhere, I'll find somewhere else to go. Not the end of the world.



#5 Max Norris

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Posted 13 September 2013 - 20:37

They have to make money somehow, it's not cheap to run that service, I can see the motivation as long as it's not obnoxious. (Self-induced hypocrisy level over 1000, what with AdBlock and all installed.) That said, meh, I'm using a custom client I wrote for my own use anyway, easily filtered.