On 7th February 2018, Twitter finally reported that it has started generating profits for the first time in twelve years. The company managed to rake in $91 million in the last quarter of 2017, compared to $167 million loss for this quarter last year.
The profits have improved Twitter’s tipsy reputation in the digital market. It should be noted though that this success didn’t come out of the blue; Twitter had to refurbish the entire platform to make it more viable for making money. Here’s how they did it.
Extreme cost cutting
The prime reason for Twitter’s poor financial performance can be attributed to having too many employees for what it does. Twitter’s whole marketing exercise with Vine failed miserably and finally, it decided to discontinue the service in 2016. Twitter apparently had to lay off 18% of its workforce to achieve financial stability and the results are quite obvious. Twitter has grown more cautious ever since Jack Dorsey stepped up as the CEO. The company is not venturing into uncharted waters like it did before and is seemingly following a solid strategy.
Making Twitter more hospitable for online marketers
Online marketers find Twitter a restraining platform, although the user statistics have continued to remain stagnant over the years. The ad revenues which are the main sources of income for Twitter did not see any significant jump as marketers refrained from advertising their products on Twitter. This was mainly due to the drop in the average engagement of users. Not all Twitter users are active; a few who remained active were totally unaffected by ads. In the past year, all of Twitter’s efforts were concentrated on tweaking their platform to lure in more digital marketers. It also doubled its character limit to accommodate more variety of users and marketers. This has resulted on average about a 7% increase in ad sales.
Beyond achieving profitability, Twitter’s priorities for 2017 were focused on growing live video to increase the audience engagement on Twitter.
In 2017, Twitter secured a 24/7 live video partnership with Bloomberg and inked dozens of deals with other networks for shows. It streamed 1,140 events in the fourth quarter and secured 22 new partnerships.
Rebuilding trust with users
Owing to the growing discontent among users over rampant abuse and harassment, Twitter has become somewhat of a confused platform. From time to time users and marketers have complained about the abuse on the platform. Disney who was rumoured to have been keen on acquiring Twitter also declined the offer citing growing abuses as the main reason behind the decision. It is easy for influential people to criticize marketers resulting in the downgrading of the platform. A similar thing happened when President Trump publicly criticized Amazon on Twitter which eventually turned out to be a baseless accusation. Amazon faced a lot of negative backlash resulting in a dip in sales.
In a recent press conference held earlier this year, Jack Dorsey acknowledged the problem and assured users of an aggressive policy to curb abuse on Twitter. Luckily this assurance has reignited the interest of both marketers and users whose engagement numbers have significantly improved. Monthly active users on Twitter have increased by about 4%.
Twitter’s strong standing in the market can be totally credited to its new reboot policy which makes large statements about the company that- ‘Twitter is here to stay no matter what’.
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