How Lucrative Content Deals Will Be Twitter’s Making

In this column piece, B&T‘s editor-in-chief, David Hovenden, takes a look at the spluttering juggernaut that is Twitter. And, he finds there’s finally some green shoots emanating after more than a decade of trying…

In June this year at Cannes, Twitter COO Anthony Noto told a group of journalists Twitter had finally found itself. Although 11 years old, Twitter has only known what it has been for two years: the place where you see what’s happening first.

It’s a moment of extraordinary clarity for the company, which has reeled from its inability to convince the market of its investment credentials and has been constantly beset with rumours of an imminent takeover.

Since floating with a share price of US$41 in November 2013 and rising to a high of US$69 in January 2014, the company led by its part-time CEO Jack Dorsey has been in general decline in the equity markets ever since. For the past 12 months, it has languished in a record low trading range of less than US$20. Despite having proclaimed to have found itself for nearly two years now, it hasn’t found its way into investors hearts it would appear.

So what has been the root of Twitter’s problems? For the company, which now hangs on to being the place where news breaks, its revenues and ability to turn a profit are hard to overlook. After growing revenue at more than 80 per cent for its first five years, it posted a decline in revenue and profit at the start of the year and subsequently got smashed.

Its user base also stalled and remains at a stubbornly slow growth rate. After shooting up from 30 million users in 2010 to just shy of 300 million users in 2014, it now only has 328 million regular monthly users. A very slow growth pattern for nearly four years, despite being the medium of choice of President Donald Trump.

So it’s with this context you can see the magnitude of what hangs on today’s announcement.

It’s Global VP of Revenue & Operations Matthew Derella told B&T he was super excited and positive about how marketers would react to the announcement.

In essence, Twitter has sown-up a series of content deals such as the Australian Open (Tennis) and the red carpet from the Aria music awards with broadcast partners to provide a safe advertising platform.

What this means for brands is the anarchic world of Twitter, which no-one has ever been able to control properly, is put on hold and replaced with big rating live event content Twitter has always fared well in.

Importantly, Twitter rates very strongly with 18-25 year olds. An audience television has struggled to attract and retain; cord cutters or ‘cord nevers’ as Derella refers to them.

In many ways, Twitter’s new move is as ingenious as it is audacious. Despite claiming its wild side as the place where you find out about what’s going on first, it’s now building a carefully manicured garden for advertisers that looks a lot like . . . well, television.

Here’s hoping it works for them.

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