New Apps a Game-Changer for Twitter, Inc.
Twitter, Inc. (NYSE:TWTR) is under a lot of scrutiny these days. Investors are worried about its user growth, as well as its ability to monetize its userbase. However, if you take a look at Twitter’s product, you’ll see that it is being improved constantly and a good product could bring a turnaround for the TWTR stock price.
Despite the negative sentiment surrounding the company these days, Twitter did manage to grow in the recent quarter. In its third quarter of 2015, Twitter’s average monthly active users (MAUs) increased 11% year-over-year to 320 million. Meanwhile, revenue surged 58% year-over-year to $569 million, which was also above the high end of the forecast range of $545 million to $565 million. (Source: “Twitter Reports Third Quarter 2015 Results,” Twitter, Inc., October 27, 2015.)
Twitter, Inc.: Improving User Experience
Twitter’s biggest problem has been that the company does not clearly communicate why people should use its service. In fact, Twitter has more than 95% brand awareness in its most important global markets, but the company only managed to achieve less than 30% penetration of users in those markets.
Fortunately, the company is making progress in tackling the problem after bringing back Twitter co-founder Jack Dorsey as CEO. Under Dorsey’s command, disciplined execution, simplified services, and better communication when it comes to proving the value of Twitter’s platform has become the company’s three areas of focus. As for growth engines, Dorsey believes that Twitter, Periscope, and Vine represent the company’s strongest growth opportunities.
One thing Twitter has definitely accomplished is making its service a must-have for a lot of consumer-facing companies. Oftentimes, when consumers want to be updated on what a company is up to lately, they can find it on Twitter. Thus, Twitter has effectively become an essential marketing platform for corporations.
For example, according to Porsche’s media and social media engagement manager Alissa Clauson, Twitter “brings our audience to our events.” The video feature on Twitter has also become an essential marketing vehicle the company: “We utilize it for our brand campaigns, we utilize it for our daily posts, and we utilize it to showcase our cars and what they can do,” said Clauson. “It’s going to become a consistent strategy for us as we move forward.” (Source: “Influencer Voices: Why Video on Twitter is a Key Marketing Vehicle for Porsche,” Twitter, Inc., November 12, 2015.)
To further improve Twitter’s appeal to advertisers, the company introduced “Twitter Brand Hub” in October 2015. Twitter Brand Hub is a suite of analytics tools to help advertisers understand their brand’s share of the conversation, key audiences, and trends. For instance, the “TrueVoice” metric measures how much of Twitter’s conversation is about a certain brand, compared to its competitors. Brand Hub is currently available for large and medium-sized advertisers in English-speaking countries. (Source: “Introducing Twitter Brand Hub,” Twitter, Inc., October 26, 2015.)
The Bottom Line on TWTR Stock
At the end of the day, user experience is the key to success in the Internet industry, so it’s a good thing for Twitter to continue to improve its platform. By having more analytics tools, marketers are able to gather more insights to improve their results.
In the process, it would also make Twitter more appealing as a marketing platform and hopefully its ad revenue would continue to grow. The company is already showing signs of improvement and the TWTR stock price could see a turnaround soon.