Twitter Needs A Facebook-Like Focus To Succeed

Aug.19.14 | About: Twitter, Inc. (TWTR)

By Aman Jain

Twitter (NYSE:TWTR) is following Facebook's (NASDAQ:FB) footsteps by focusing on small and medium-sized business with new results-based advertising rates. New services launched by Twitter resembles closely Facebook, which already offers the options for clicks, likes, apps installs and other features that have tasted the success in alluring the SMBs.

Management needs to change focus

However, Twitter is not as successful as Facebook for the mere reason of ad price structure differences, says a report from by Adam Levy. The focus of Twitter is different from Facebook, as the former describes itself as a "real-time information network", whereas Facebook is a social network.

Management at Twitter is doing little to exploit the area, an opportunity where the company could do well to become a powerful tool for how business connects with customers, believes Levy. For getting advertisers on the website, the company needs to focus on its core competencies. Contrary to the micro-blogging site, Facebook is preferred by small businesses, as it offers owners the facility to connect with customers, tell about the business and also engage with customers. Twitter, on the other hand, offers very less space for any advertiser to talk about business, and focuses less on attractive pictures.

In the previous quarter, Twitter had only 4.5 million small business accounts on its network. However, the latest ad tools from the company are expected to attract small business and convert them into advertisers. Although Twitter has not disclosed any specific numbers on its advertising customers, it claims that it has an advertiser base of thousands.

Twitter needs a Facebook-like focus

A new pricing structure will hopefully increase the advertiser base of the company. SMBs prefer a results-based pricing structure more than any other strategy, for the simple reason that the option offers them a better view of their projected advertising return before they spend the budget amount into a campaign.

Twitter's new tool is sure going to convert a greater number of businesses into advertisers, but whether it will be able to increase the number of advertisers on the platform cannot be determined as of now. The success of the tool depends upon the capability of management of how well it can covert the business into advertisers.

During its conference call, the company did not discuss the strategies it will deploy to connect people. Just adding the ad-pricing options would not be enough for Twitter if it wants to allure advertisers. In the end, the author concludes, "If Twitter wants to win more advertisers, it needs to copy more than ad-pricing tools from Facebook, it needs to copy Facebook's focus on connecting people."

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Disclosure: None.