Twitter Inc is turning its spotlight onto a new demographic in its bid to lure more advertising dollars to its social media platform: deep-pocketed business users. The microblogging service has 330 million monthly active users but has struggled to turn its popularity into profit, losing out to rival Facebook Inc for ad dollars.
Now it is going after a more niche business audience, taking on LinkedIn, Microsoft Corp’s professional online network. For several years, Twitter has had an employee whose job is to teach and encourage CEOs like Goldman Sachs Group Inc’s Lloyd Blankfein and Walt Disney Co’s Bob Iger to tweet. They both do, sparingly.
Twitter launched a round-the-clock streaming news network with Bloomberg Media this week, which is designed to appeal to business people as well as a general audience.
The 24/7 news service, called ‘TicToc by Bloomberg,’ live-streamed coverage of British Prime Minister Theresa May discussing Brexit negotiations on Wednesday, its third day of operation, attracting about 4,000 viewers.
It also racked up 55,000 concurrent views on the US House of Representatives vote on the tax bill on Wednesday. Global news updates had total views in the hundreds of thousands. Twitter and Bloomberg have not publicized financial arrangements over TicToc, but such projects usually work on a share of ad or sponsorship revenue. Neither commented on Wednesday.
TicToc has seven initial sponsors including wireless carrier AT&T Inc and derivatives marketplace firm CME Group Inc. Bloomberg has said it will eventually open up to additional sponsors. Twitter’s shares rose slightly on Wednesday. They are up 45 percent over the last 12 months, outpacing the red-hot technology sector, even though ad revenue was down 8 percent in the third quarter from the previous year, the third consecutive quarter of year-over-year declines.
The stock is still less than half its value in late 2013 after its initial public offering, when investors had high hopes Twitter would cash in on its fast-growing user base. TicToc launched on Twitter just a few months after LinkedIn introduced video ads on its service. The professional networking platform is a top choice for business-to-business advertisers and presents tough competition for Twitter, media buyers told Reuters.
LinkedIn’s video ads are attractive to advertisers because the service has job titles and resume data that advertisers can use to target their messaging, said Aaron Shapiro, chief executive at Huge, a digital agency that counts American Express Co and TD Bank as clients. “Twitter is more about broadcasting, so if I want to get my name out, that’s good,” he said. “LinkedIn is much more targeted.”
Twitter has the potential to be a great platform for advertisers that want to reach business executives and investors, because so many are on Twitter, said one executive at a Fortune 500 company who asked for anonymity because he is not permitted to speak to the media. “If you are a packaged goods company, you probably care more about the middle of the country, so Facebook is the better channel,” he said. “But for us, we are excited to see Twitter partner with Bloomberg.”
Competing with LinkedIn will be difficult for Twitter because LinkedIn is better at providing measurements and results to advertisers, the executive said. Because of its detailed user data, LinkedIn’s strength is showing advertisers where in the sales process it contributed to converting a customer, said Craig Atkinson, chief investment officer at PHD, a unit of Omnicom Media Group.