onStrategy

Twitter should change their business model

November 15, 2022
2 minutes

Strategy | Business Models | Tech

It’s been two weeks since Elon is in charge at Twitter and I just can’t keep up with all the ongoing mess. Not necessary an overall bad thing thou’…

Seeing the tweet below, I was wondering if Twitter should change their business model. After all, they are having now the 7th CEO and the same business model. I must admit that I started to ignore the overall performance of the company several years ago after seeing so many failures to move Twitter in the right direction.

 


Elon Musk on Twitter activists


 

So, here are my reasons why the company needs a new business model:

    1. Most of their revenue comes from ads, more especially the channel they can’t control: brand advertising (direct response marketing). Now, how many people do you know that bought something from seeing an ad on Twitter?
    2. Brand advertising is very sensitive to recessions and other external changes (e.g. Apple’s App Tracking Transparency) and this means pain; a lot of paint (Snap is not that far away, btw)
    3. Ad inventory – when large companies (ie. Unilever) decide to leave Facebook, the overall price of each ad will decrease, make it a competitive platform for SMEs and hence offsetting any large impact. (the advantage of long tails). This is not the case on Twitter, hence Elon’s message above
    4. Tapping (e.g. Instagram) vs. Scrolling (Twitter) is much easier to monetize
    5. Leisure vs. debating – people go to Twitter for information & debates. Why not capitalize on this?
    6. Although a Super App won’t be possible in Europe/US
    7. Twitter started in an era which favorized text. Now it’s all about pictures and video and those who prefer text, who are a minority to be clear, will likely pay for it
    8. The SuperApp will not materialize, but how about a SuperInfo App? Twitter is, after all, a place where you see news, opinions from analysis, memes and so on. Their newsfeed is unparallel when it comes to these
    9. The Superpack of apps – studies show that most people use a limited number of apps on their phone: fb, insta, LinkedIn, twitter, tiktok and maybe 1-2 more. Every local/global event will push all people towards Twitter, not fb/insta or linkedin; hence, even more reason to ask for money.

Building a community of developers around your company can be the key of future success, for this the company should offer something really exciting and that starts with changing the business model.

Discover posts:

Disney's priorities

Disney can be the Apple’s of experiences

Disney should focus on the following: They should sell the Linear networks (excl. ESPN) Look for distribution and content (ie. partnership) Focus on the experiences. In Q3 2023, Parks & Experiences brought 69% of the total profit (!) They can really be the Apple of experiences, but they need a (...)

Read more

META’s “year of efficiency”

Source: https://1000logos.net/ “At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years. Higher interest rates lead to the economy running leaner, more geopolitical instability leads to more volatility, and increased regulation leads to slower growth and increased costs (...)

Read more