How Twitter Balances the Interests of Large and Small Advertisers

Understanding the needs of different groups of advertisers

As Twitter (TWTR) works to attract both big brands and small businesses to advertise on its platform, one of the things the company has had to do is balance the interests of these groups of marketers so that they can all derive value from its platform.

Since the interests of large and small advertisers do not exactly align, creating value for them has meant trying to understand what each group of advertisers wants. Twitter has figured out how to balance the interests of large and small advertisers on its platform, the company’s chief financial officer, Ned Segal, said when he spoke at a recent UBS technology conference.

How Twitter Balances the Interests of Large and Small Advertisers

Twitter’s large advertisers are focused on ROI

Segal said that larger advertisers on Twitter are interested in a demonstrable ROI (return on investment), and what Twitter is doing for this group of advertisers is providing them with better ad measurements. To win over large advertisers, Twitter is expanding its sales force so that it can get the story of its improving ROI out in front of more large advertisers.

As for small advertisers, Twitter has figured out that technology and support address their needs, and this is where its self-serve advertising program comes in. Additionally, the company is testing a new automated advertising program that is offered on a subscription basis for $99 a month. The automated subscription advertising program is called Promote Mode.

Ad sales fell 8%

In 3Q17, Twitter’s advertising revenue fell 8.0% YoY (year-over-year) to $503 million, marking the company’s fourth consecutive quarter of sliding advertising sales amid fierce competition for online advertising budgets. At Facebook (FB) and Google parent Alphabet (GOOGL), advertising sales rose 49% and 21.4% YoY, respectively, in 3Q17. Snap (SNAP) and Yelp (YELP) recorded advertising sales growths of 59% and 18% YoY, respectively, in the quarter.

Understanding the needs of the various groups of advertisers on its platform may help Twitter bring its advertising business back to growth quickly.