Mobile Commerce

Twitter’s Commerce Strategy Remains Vague As Profit Dips

Twitter’s “in-the-moment” commerce strategy is part of its plan to further monetize the social networking service, but Twitter still seems to be unable to find a way to expand its commerce plans quickly enough to turn around a profit.

Twitter’s in-tweet purchase option was among one of the topics discussed during Twitter’s first-quarter earnings call with analysts yesterday (April 28). This particular commerce strategy has been one Twitter has targeted with its “Buy Now” button on Twitter, which has started with tickets — including sports, concert and movies.

While its “Buy Now,” feature is starting with small commerce, Twitter’s CEO Dick Costolo said the company plans to look into its options in the future, but doesn’t have any more plans in the works in terms of expanding Twitter’s payments or commerce reach. He did highlight, however, that the ability for Twitter users to buy tickets instantly, and with one click, has remained a popular option that may eventually be worth expanding. But Twitter won’t likely expand to big purchases using its “Buy Now” button, as Twitter has always said they believe its users won’t use the feature for anything other than quick buys.

Costolo also didn’t elaborate on how much its commerce strategy is contributing to its bottom line. Instead, he provided more general comments on the subject.

“Tickets are one of the most recent examples of in-tweet purchase we’ve started to begin exploring and will continue to run those explorations,” he said. “I’ve highlighted in the past that it’s in-the-moment commerce that we’re particularly excited about when we think about in-tweet purchases. We continue to explore different ways to think about in-the-moment commerce and don’t have any additional plans to announce yet.”

While Twitter is typically asked at each earnings call about its commerce and payments plan — particularly because of their ability to help Twitter monetize its services better — the social media network executives kept their comments geared more toward Twitter’s advertising revenues, plans for growth with retail marketing and how to leverage its tools to make more consumers actively use the service.

While its user base is up, Twitter might just have to figure out a way to monetize the service more as it produced another rocky quarter.

Twitter posted a revenue of $436 million, up 74 percent, year-over-year, but that was below Twitter’s projected revenue range of $440 million-$450 million. Twitter saw a net loss of $162 million on the quarter, which was attributed to “lower-than-expected contribution from its newer direct response products.”

“It is still early days for these products, and we have a strong pipeline that we believe will drive increased value for direct response advertisers in the future. We remain confident in our strategy and in Twitter’s long-term opportunity, and our focus remains on creating sustainable shareholder value by executing against our three priorities: strengthening the core, reducing barriers to consumption and delivering new apps and services,” Costolo provided in the company’s earnings statement.

Twitter’s monthly active users (MAUs) for the quarter were up 18 percent, year-over-year, to 302 million. This compares to 288 million in the previous quarter. Twitter said that its average mobile MAUs represented roughly 80 percent of total MAUs.

As part of its earnings report, Twitter announced a partnership with Google’s DoubleClick platform, which the company hopes will improve its advertising performance measurement and attribution for Twitter direct response marketers.

Twitter also announced yesterday that it extended its reach into the data side of the commerce with the acquisition of TellApart, a marketing technology company that provides retailers and eCommerce advertisers with cross-device retargeting capabilities through the use of dynamic product ads and email marketing.

“Consumers now move fluidly between apps, devices and platforms, and performance advertisers are in need of more effective targeting and measurement tools that work seamlessly if, say, someone browses for products on a mobile device but ultimately makes a purchase on a desktop device,” Kevin Weil, Senior Vice President of Product at Twitter, said in a company release. “By bringing Twitter and TellApart together, we’ll be able to help performance advertisers reach users wherever they are, whether on desktop or mobile.”

TellApart will also play into Twitter’s push toward its mobile product side and its attempts to monopolize the social media app by offering tools for the retail marketing world.

“TellApart’s strengths in personalization, dynamic product ads, commerce data and with retail advertisers are strong complements to Twitter’s deep experience in mobile, understanding users and the app ecosystem,” said Josh McFarland, co-founder and CEO of TellApart.

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