Twitter’s ad business has shrunk, but ad buyers say it’s stabilized
Unfavorable competition with Facebook and Google -- and the commodification of its own inventory -- has led advertisers to slow their spend on Twitter.
For four consecutive quarters, Twitter’s advertising revenue has declined year over year. But Twitter’s ad business isn’t in a free fall so much as it has settled down, according to ad buyers.
Twitter’s ad business suffers under a Goldilocks paradox. Twitter has a big audience, but not a big enough one. It’s a good place for brand advertisers to get people’s attention, but not all the time. It has strengths in direct-response advertising, but they’re obscured by its direct-response struggles. The real-time nature of its product separates it from other social platforms like Facebook, but it also leads advertisers to lump it in with news publishers instead of social platforms (a categorization even Twitter has acknowledged). As a result, Twitter remains able to compete for a share of advertisers’ budgets, but it’s not able to win as much share as it might have previously.
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