Are recent changes designed to make Twitter profitable?

Nov 30th, 2015

Recent changes to the social media platform have drawn its users’ ire, but are they the latest in a line of changes to try and monetise twitter, and will they work?

It is no secret that Twitter is the least profitable of the major social media platforms, having reported losses year on year. Until recently, however, it could always point to its seemingly endless growth in users as a reason to be optimistic. This changed as reports throughout 2015 have shown stagnation in user growth leading to a decrease in stock value.

Co-founder of Twitter Jack Dorsey’s first term as CEO was not the greatest success and he lost the position, becoming chairman of the board in 2008. In a manner that parallels Steve Jobs’ success with Pixar after initially stepping down as Apple CEO, however, Dorsey began a second project, Square, which Business Insider valued at $3.2 billion back in 2012.

His return to Twitter’s top position has been met with mixed opinions, but his primary duty must be to finally make Twitter profitable.

Big data dollars?

In this regard, more must be made of Twitter’s high profile purchase and integration of Gnip, the Tweet promotion and other paid tweet options. Which leads to the question: are the changes we’ve seen since Dorsey’s return the first of many changes with this intention in mind?

The removal of the social share display – the tweet counter – from its share buttons seems to suggest movement toward the monetisation of something Twitter has in abundance – data. With Gnip packages, ranging from $300 – $4000 (£200 – £2667) in 2011, now relying on inbound query to establish a price it is possible that they are banking on brands looking to them as a one-stop API platform on which they can monitor social media activity.

It is certainly a gamble – but with social media metrics now an important part of brand marketing strategies, it is possible that a gradual withdrawal of data behind a Gnip paywall could feasibly drive brands to accept the necessity of Gnip. Though Buzzsumo immediately announced the release of a chrome extension to counteract the move, it may well develop so that Twitter can eventually develop sufficiently sizeable insights behind the Gnip paywall to offer value for money for its users.

The psychology of love

The introduction of the love heart to replace the star symbol ‘favourite’ function is perhaps a little more difficult to see as a drive toward profits, but when one looks at the signals sent by the two actions – to love or favourite – it becomes a little clearer.

The ‘favourite’ action served in many ways (even sharing a symbol) as a bookmark for tweets – a way for users to single out content they would like to return to. Unlike Facebook’s ‘like’, the act of favouring a tweet holds little significance in terms of a social signal – as with the often seen disclaimer on retweets, it neither endorsed nor condemned the content it was used for.

Loving a tweet, however, implies approval and may be designed to increase the emotional involvement of Twitter’s user base. Combined with the gradual rollout of Twitter Moments, it is possible that Twitter is looking to increase emotional engagement and therefore increase Twitter tweet engagement’s usefulness as a signifier of intent for future changes to targeted advertisement.

Nothing for nothing

Though it remains to be seen, it is unlikely that changes to any business are done for aesthetics or user experience alone and as Twitter approaches the end of another financial year having failed to meet projections regarding user growth, and having lowered revenue projections for Q4 in late October, it is certain that Twitter will be trying everything it can to finally achieve the profitability that has always been expected of it.

We would therefore expect the changes to keep coming under Dorsey’s second reign as CEO and, if they can halt the slowdown in user growth and begin to make the most of Gnip as a B2B revenue generator, and as a data mine for ad targeting, it is possible that the next few years could see Twitter finally making progress toward profitability.

Do you have any thoughts on these recent changes? Let us know below, or contact us directly to speak to one of our experts about dealing with your social media strategy.

Facebook Twitter Instagram Linkedin Youtube