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Twitter?s next CEO must embrace data to regain advertisers

Twitter?s next CEO must increase the microblogging site?s ability to provide advertisers with consumer data, not only to remain competitive in a crowded field but to win back advertisers turned off by the site?s mobile engagement challenges.

The resignation last week of Twitter?s outgoing top executive, Dick Costolo, has focused attention on his replacement?s need to increase the user base and improve direct response advertising, the most lucrative type on the site. Improving those ads, which prompt users to take an action, such as signing up for a Web site or buying a product, is a cornerstone of Twitter?s monetization prospects and crucial to its bid to remain relevant amid a migration of users to mobile from desktop.

?As the ability to target the right consumer with the right ad improves on nearly every platform, providing data on consumers will be a key factor for advertisers deciding which platform to invest in,? said Ken Wisnefski, founder and CEO of WebiMax. 

?For advertisers, the ability to change strategies based on a measure of what works against what doesn?t hinges on knowing more of that data.?

Losing users
Although Twitter has seen 74 percent annual revenue growth, outstripping any other public company of that scale, new user growth has stalled and nearly one billion users have abandoned the site after trying it.

Besides providing data that allows them to gather more information on consumers, advertisers want Twitter to streamline its interface to get more users to click on ads. 

Periscope is a portal to Twitter's content.

The site's rapid-moving news scroll makes it less likely users will click on an ad. 

Reflecting frustration with Twitter advertising, several ad executives interviewed by Reuters said they spend more money on rival platforms, such as Facebook and Google, because they have more users, better capture attention and provide more data on how advertisers can target consumers.

Twitter did not respond to media inquiries.

About 80 to 90 percent of users scan Twitter content but do not tweet, a conference call to discuss Twitter?s most recent quarterly financial results was told. Even though about 1 billion people have tried the service, most do not become regular users.

?I think an approach that expedites the process of leading people to the content they want could create the most opportunity for Twitter,? Mr. Wisnefski said.

?The recent purchase of the live video streaming app Periscope, that is both integrated into Twitter and can act standalone, is one outside-in example of how Twitter can bring people to that amazing content faster.?

Twitter?s next CEO must focus on areas that can create greater business returns beyond impressions.

?Twitter has evolved its advertising products over the past few years,? said Tom Edwards of The Marketing Arm, Dallas. ?They have added location based targeting down to the zip code level as well as lead generation cards for direct response. 

?One of the other primary complaints is that lead capture is good, but what about lead conversion?? he asked?Measuring offline conversion is an area that needs attention to fully prove return-on-investment.?

To many who use Twitter regularly, its strength is its simplicity ? you follow someone and see what they tweet. 

?There are two types of people, those that get Twitter and think it?s amazing and those that don?t,? Mr. Wisnefski said. ?The reason there are people that don?t get Twitter is that they can spend a lot of time on the platform before seeing the most targeted and relevant content and realizing the benefits.  

?I think an approach that expedites the process of leading people to the content they want could create the most opportunity for Twitter.?

A solution that makes it easier to navigate and find the best most popular content and quickly separate it from the background noise would be a way to slow down the fast pace of Twitter, and perhaps make someone more likely to click an ad.

?Someone familiar with Twitter can do it by curating their own lists,? Mr. Wisnefski said. ?But that can take time and create fatigue.?

Targeting data
Better targeting data is paramount to move beyond Twitter?s interest signal approach to advertising. 

Mobile video on Twitter.

?This needs to include the ability to create a full view of the consumer journey vs. looking solely through the lens of behavior on Twitter,? Mr. Edwards said. ?For direct response advertisers, understanding the effectiveness and conversion or having data to further optimize their approach is one of the key areas that needs to further evolve to meet data demand. 

?Testing new ad formats both in-stream as well as potentially sticky units that extend the shelf life could highlight opportunities for better performance,? he said. ?But the key will be to extend the Twitter ecosystem to other platforms and create portable ad units that can draw users into the Twitter experience or a direct response loop.?

Final Take
Michael Barris is staff reporter on Mobile Marketer, New York