Twitter under pressure to please advertisers

Twitter Inc's next chief executive officer (CEO) faces a crucial challenge as the company seeks to appease Wall Street after this week's management shake-up - helping disaffected advertisers connect with users. And many advertisers, analysts and investors say the right person for the job is not interim CEO Jack Dorsey but company president and head of revenue Adam Bain, who has emerged as an early favourite.

Outgoing CEO Dick Costolo quit abruptly last Thursday amid pressure from investors to boost the user base and direct response advertising, the most lucrative type on the microblogging site. Such ads may prompt users to sign up for a website or buy a product, for instance, and improving them is central to Twitter's ability to make more money.

Before joining Twitter in 2010, Mr Bain was president of the Fox Audience Network where he was responsible for monetising advertising platforms across News Corp's Web properties.

At Twitter, he has helped to grow the advertising platform aggressively. He holds many of Twitter's most valuable advertiser relationships and understands the media business, advertisers said. So, he could help redirect Twitter to meet advertisers' demands and make more money.

Mr Adam Epstein, chief executive of adMarketplace, which works with search advertisers, said: "When you talk to Twitter, you can throw some great ideas on a whiteboard, but there seems to be a lack of urgency." They hope Twitter makes the site easier to use so that more people become regular users and click on ads. They also want Twitter to provide data that lets them gather more information on consumers.

Among the challenges of advertising on Twitter are the site's fast-moving news scroll, which makes it less likely that users will stop to click on an ad.

Facebook and Instagram, by comparison, showcase photos and videos in ads and display them more effectively to users, making it more likely that users will click on them. Twitter was forced to cut rates for direct response ads after they failed to deliver as promised, and it cut its revenue forecast for the year as it anticipated making US$4 million (S$5.4 million) to $5 million less each quarter.

Ad executives told Reuters they spend more on rival platforms, such as Facebook and Google, because they have more users, better capture attention and provide more data on how consumers can be targeted.

Mr Dorsey, CEO from 2007 to 2008 before he was ousted, said the CEO search has not yet begun. He has not ruled out taking on the job permanently. He said he would not change the company's strategy.

Twitter's user base is 302 million, compared with Facebook's 1.4 billion and WhatsApp's 800 million. Advertisers said the main problem lies in its "untapped potential". About 80 per cent to 90 per cent scan Twitter content but do not tweet, according to Affinio, which measures community engagement on digital platforms. About a billion people have tried Twitter, but most do not become regular users.

Twitter has said it will partner Google's online advertising service DoubleClick and marketing technology company TellApart, which helps advertisers measure ad views, clicks and calculate investment returns, to provide more data to advertisers. But it has not announced when those partnerships will go into effect.

Mr Barry Lowenthal, president of Media Kitchen, a media planning and buying agency, said he uses Twitter for product announcements, such as a new fragrance, but not regularly for advertising. "It has a very particular role," he said. "We don't use it regularly like we do Facebook and Instagram."

This article was first published on June 17, 2015.
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