Election 2016 Will Make or Break Twitter: Here's How the Struggling Social Network Plans to Win

Editors' pick: Originally published June 8.

Election 2016 could be huge for Twitter (TWTR) . Between @realDonaldTrump, chatter and battles among online politicos, and a digital political ad spend projected to top $1 billion, 2016 has the potential to be the best year yet for the struggling social networking site. Deep dive: The first $1 billion digital election

And for Twitter and its shareholders, November can't come too soon. The company has so far been unable to come up with effective strategies to reverse slowing user growth and declining advertising revenue, which have bogged it down quarter after quarter. Several high-level executives have exited the company in recent months, and, recently, one analyst concluded there is "no compelling reason" to own Twitter stock, declaring "hope is not a strategy."

And while revenue is a problem, Twitter's issues are deeper.

"I think there's a misconception out there that the operating, financial and stock performance have been mixed and disappointing because they haven't turned their users and engagement into revenue and profits," said Scott Kessler, an analyst at S&P Global Market Intelligence. "I would qualify that by saying that the No. 1 issue for the company is not monetization, it's actually users and user growth. If they are not able to grow the user base substantially as a result of all of these things going on, what does that say about the platform?"

Given that it was not so long ago that Twitter was considered to be on the same playing field as Facebook, which continues to succeed in every way imaginable, the 140-character-based network has clearly fallen far. The 2016 election represents a prime opportunity for the company to bounce back -- the question now is if it can.

There are some good signs. 2016 will mark Twitter's first full election cycle with a team dedicated to political advertising ready to go (its team launched originally in February 2012). The company started seeing ad spend for the current race last July -- thanks, in part, to the over 20 presidential candidates who entered the race for the White House -- but it still expects the vast majority of dollars won't come in until the second half of this year.

In other words, there is potential but also a lot of uncertainty.

"This is really the first full cycle that we're able to see how all of this unfolds from a revenue perspective," said Jenna Golden, head of political advertising sales at Twitter. She declined to provide an estimate of the specific amount Twitter hopes to make in political advertising this election season but said is expected to be millions more than in 2012. 

Twitter has sought to position itself as a thought leader in the political advertising space and to get campaigns and political action committees to consider the platform as an integral part of their strategies early on. It has hosted events to introduce campaigns and committees to the possibilities of using Twitter as a platform to reach donors and voters, rolled out new products designed for campaigns and reached out to specific camps directly in an effort to position itself to capture more political ad spend.

At the center of Twitter's technology are a range of products and services that benefit political campaigns. Twitter's direct-response advertising help campaigns raise money by inserting fundraising links into promoted tweets and acquire emails through lead generation cards. Twitter estimates direct-response ads will account for 10%-to-20% of its political ad revenue this election cycle. The rest will come from promoted tweets, promoted "moments" (a spot in the section featuring the most talked-about stories of the day), "first view" (exclusive ownership of Twitter's top ad slot for 24 hours) and video ads. All will be used to persuade voters, mobilize them to help the campaign and then, on Election Day, to go vote. 

"Up until this point, the majority of the spend has been very acquisition-based, so really far down the funnel, looking very closely at how much can we get an email for, and how much can we do in terms of fundraising to ensure that we're going to be ROI positive?" Golden said. "The majority of the spend to date has not been where the biggest budgets are going to be."

Twitter believes the biggest political budgets won't come until July through November, but when they do arive, the payoff could be enormous.

For example, promoted tweets -- paid-for trending hashtags pinned to the top of the Twitter homepage -- will likely be an important revenue opportunity. On a regular day, a national promoted trend (of which there is only one a day) is a $200,000 buy. On bigger days, such as during the Republican and Democratic Convention and during the debates, reservations will be subject to premium pricing.

At the core of Twitter's advertising offer -- which includes promoted tweets, native video and direct response, among other items -- and what it hopes will set it apart from rivals Facebook and Alphabet (GOOGL) is the "live moment," or Twitter's ability to seize upon the momentum of real-time, trending events. 

"We focus very much so on the things where we are strong and where we are unique," said Golden. "For us, it's all about the live moments, so that's an area where we win, and where we know that the candidates and the committees and the PACs are really spending their time on Twitter."

These moments include conversations around trending hashtags, topics and breaking news and they help campaigns reach voters, influencers and journalists in turn. It remains the go-to place for up-to-the-minute discussion, and though Facebook also has a live component (and is actively pushing Facebook Live for streaming video), Twitter leadership still believes it wins in this area.

Twitter's in-the-moment appeal appears to be resonating with some campaigns, which have taken advantage of the platform during live events -- both planned and unplanned.

When a bird landed serendipitously on Bernie Sanders' lectern at a rally in Portland, Oreg. in March, his camp jumped on the opportunity to fund-raise off of the #BirdieSanders hashtag, resulting in what Golden says has been the Vermont senator's most successful donation day on Twitter. 

Likewise, when Donald Trump accused Hillary Clinton of playing the "women's card," her camp took advantage of the trending #womancard hashtag to raise money on Twitter. Deep dive: How Trump is changing political advertising forever

"It really was sort of a 'strike when the iron's hot' kind of moment," Golden said.

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