Wall Street has long been skeptical of Twitter (TWTR) due to its inability to drive revenue through ads the way some other platforms have (see: Facebook).
But, there's hope. With the return of CEO Jack Dorsey, Twitter is now reportedly contemplating removing the 140 character limit on tweets and replacing it with a 10,000 character limit. With this change, Twitter would begin to compete with Facebook and Google for advertising dollars and take the platform from a stagnant brand and launch it into a new direction. Allow me to explain.TWTR data by YCharts
In the social ad sphere, Facebook dominates. But unlike Facebook, Twitter hasn't attracted advertiser's dollars because it's a "quick hit" scenario without stickiness for strong ad development. The way things are on Twitter right now, everything moves so fast; factors like catching the right trends, using the right hashtag or just finding the right time to do a promotional tweet are so much more crucial. For that reason, Twitter hasn't generated much return for advertisers (my clients).
Twitter's core users are either there to get brief updates from the influencers they care about or interact with folks they don't know personally, but with whom they may share a common interest. For influencers, it's perhaps one of the greatest tools ever created for easily broadcasting a message. In fact, one of the best scenarios we've seen for advertisers on Twitter has been to pay those influencers and celebrities to tweet to their followers; of course that revenue goes directly to the celebrity and not Twitter.
Twitter needs to give people another reason to use Twitter. Quoting Matthew Ingram from Fortune magazine, "What Twitter needs is new users, and lots of them-and it needs them to spend longer on the network, interacting with tweets and (hopefully) Twitter ads."
While ad-spend on Google remains dominant, digital marketing agencies like ours are finding themselves to be fully optimized on that platform, and have started to spread budgets out to cheaper options like Facebook, Bing and Pinterest. To a lesser degree, we are using LinkedIn as it can get expensive and only works for business-to-business applications. Twitter is on par with LinkedIn in the number of our clients that utilize it for sponsored ads.
If Twitter becomes a more detailed platform, while it's a huge derivation, could create a better marketing platform and scale ad revenue. While this significant change seems to alter the most basic functionality that made Twitter popular in the first place, it still offers something that you cannot get anywhere else, and that is a single online space where people can quickly see what the influencers they care about are saying.