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Award-winning work, focussed on results

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Jul 2015
7 MIN READ

Is Twitter a Sinking Ship?

simon ensor

The announcement that Dick Costolo, Twitter’s CEO for the past five years, will be leaving the company next month has fuelled the fire of discussion surrounding Twitter’s future. The social network is one of the largest players in the market, but speculation has been growing in regards to Twitter’s ability to keep up with other platforms with higher user acquisition rates and growth. Costolo’s standing down does not initially appear to be a captain abandoning his sinking ship, more of a gentle nudge off the metaphorical gang plank by a disgruntled group, but it has served to highlight that not all is rosy in the land of the little blue bird.  Twitter’s IssuesWhilst Twitter can boast 300 million active monthly users and no one can deny that many of its users (a.k.a the Twitterati) have an almost obsessive addiction to the platform. However, this 300 million active users is only on par with Instagram and pales in comparison to Facebook’s 1.4 billion. Furthermore, the real issue for Twitter is not its active user figure but instead those that have shown interest…..only to look elsewhere. Some figures suggest that Twitter has had 1 billion users try the social network and then leave which is a staggering statistic. In a BBC article, they reported a statistic that 44% of Twitter users have never posted although this could be counteracted by the fact that Twitter also doubles up as a real time news channel and therefore does a user necessarily need to post in order to gain value from the network? Twitter is a social network, it requires regular posters and interactions to succeed. Otherwise it would be a news channel. Just another issue of Twitter’s lack of clarity in regards to its product roadmap….. The fact is that many of its investors are deeply unhappy, most notably one of their largest investors, Chris Sacca. Sacca recently posted a lengthy (8,500 words) open letter in regards to the issues faced by Twitter. His main concerns were centred around the lack of attraction for new users and therefore stunted growth – Twitter missed analysts’ growth targets for Q1 of 2015 – and articulated a lack of trust by Wall street in the former management team. Sacca’s article appears to have been the final gentle push for Costolo and is mentioned in almost the same breadth across all news channels in regards to Costolo’s resignation. Is Twitter Unattractive For New Users?What has made 1 billion people try out Twitter and then decide it isn’t for them? Clearly the social network has significant barriers to entry, not least its deluge problem and lack of clarity around the product. As Sacca described in his letter (*diatribe), Twitter has failed to innovate at the same rate as other social networks and cannot afford to progress so slowly.We view one of Twitter’s major issues as a social network as their inability to curate content; their chronological timeline is not showing the best content to users. Whilst they have tried to notify users of the best ‘missed’ content, this deluge of tweets creates an almost manic and frenzied news feed requiring an expertise and knowledge of the platform to get the very best out of it. In short, new users find it hard to get their head around what you are actually supposed to be using it for.In addition, many people view Twitter as requiring a considerable amount of time investment, either you are all in or you are out. Whilst this is certainly an attractive sticking point for active users who are heavily invested in the platform, it does make it an intimidating environment for new users. Is Twitter Going To Die?Twitter is struggling, you only have to look at the decline of its share price (recently risen slightly after Costolo’s resignation) to see that interest, at least from an investor’s perspective, is starting to wane. However, Twitter has a rather remarkable USP. There is no other platform that can deliver up to date real time news like Twitter. Sure, you have to know who to follow in order to get trusted news updates but regardless, the Twitterati do an amazing job of notifying the world of news before any other platform and that is not be scoffed at.It will be interesting to see whether the new CEO and their management team decide to push Twitter into an innovation cycle and attempt to decrease barriers to entry. From a social media marketing perspective we can anticipate some innovation within advertising in order to increase its own revenue (currently at $2.2 billion a year) as this will be one of the necessary improvements to stabilise its share price decline. As such, Twitter may become a more attractive proposition for social media marketing as the company look to address the issues so lengthily put forward by Mr Sacca.Its current users do not seem to be that bothered about product innovation but from a user acquisition stand point Twitter is going to have to make some major changes. This lack of user growth appears to be the most significant issue for both Twitter as a social network and also the share price. New users need to feel at home straight away, be able to quickly locate and identify the very best content and feel comfortable posting within such a manic atmosphere. More importantly, they need to understand why they are using Twitter.
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