How does Twitter Make Money?

Twitter needs no introduction!!!

Twitter was launched in 2006. It is a popular open social networking channel that people use to interact with each other in short messages – “TWEETS”. No matter whether the tweet can be breaking news, opinion on current affairs, or any latest update of the company. Few people are using Twitter to follow their favourite celebrities.

It’s not just about “Oops… My Toast got Burnt” as many people may think. It’s more than that!!! Twitter is all about sharing opinions and thoughts. Also, discussing trending topics and current affairs. The social channel has experienced notable growth of users in every age-group since its launch.

Origin

Jack Dorsey, Biz Stone, Noah Glass and Evan Williams founded Twitter in 2006. The social platform headquartered is located in San Francisco, United States. Twitter business model is a microblogging channel which soon accomplished popularity after its launch around the world. The social channel has over 330 million active users per month. It’s the 9th largest social networking channel in the world.

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How does it work?

Creating a Twitter account is simple and easy. Users can create an account from the Twitter home page.

Twitter encourages users to connect, follow and interact with several individuals, top brands, media outlets and more and create tailored messages according to user interest. Users can post photos, videos, gif, links and more. Twitter allows people to know what’s happening in the world, real-time updates, etc.

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Twitter statistics for 2020

According to 2020 analysis, over 1.3 billion Twitter accounts are created. There are over 330 million active users every month and there are 500 million tweets sent every day. There are 350,000+ tweets sent per minute. on this platform, Twitter annual revenue has reached 3.46 billion US dollars.

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How does Twitter make money?

Twitter is one of the largest social networking platforms across the globe. The count of active users is increasing every day. The microblogging platform is helping users, advertisers and others. On the other hand, it’s earning money. 

Let’s discuss how Twitter makes money?

Twitter is earning money in two ways such as advertisements and data licensing. The platform earns by selling advertisements through promoted posts, promoted stories and more. These ads will appear on their user’s feeds. Ad revenue was accounting for 85% and the data licensing segment is making 13.5% revenue every year.

Let’s dig deeper into the topic!!!

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Native marketing

As per research, 85% of Twitter revenue is generated through advertisements.

There are three ways for any business or individual to promote on Twitter.

  • Promoting a tweet that will be visible on the user’s timeline
  • Dedicatedly promoting a complete account
  • Promoting a trend

With the advancement in technology, Twitter has changed its way while displaying the ads or posts in the user’s timeline. It allows photos or video previews to play without user’s interaction. It means users don’t need to click on the play button. The video automatically plays on their timeline. It helps the advertiser to promote and show off their content effectively. Twitter tends to charge it’s advertiser according to the amount of interaction their content generates. Businesses or individuals can set a budget while setting up an ad campaign on Twitter. The social channel has a “Bidding System” to promote. Here, advertisers can compete with others to display their ad in a particular space.

The business has an opportunity to advertise their products or services through “in-stream video ads”. It is the best way to deliver video content to the target audience. Twitter is receiving better revenue by promoting other businesses with in-stream video ads.

Did you know, 75% of advertising revenue is generated from mobile devices? Yes!!! Keeping it simple, Twitter is earning primary income from mobile users.

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Data licensing

Data licensing or Firehose is Twitter’s other primary revenue stream. The micro-blogger sells “Firehose” – it’s public data, the firehose has over 500 million tweets every day.

Many businesses can use public data for several purposes. They can dive deep into the public information to analyse customer interest, preferences and more. With these insights, companies can display ads to the target audience.

Twitter is generating 13.5% of revenue from data licensing. It means the social channel is earning $0.5 billion through data license. Twitter sells subscriptions to users data exceeding its public API to business, designers and developers who are planning to access and analyze real-time data on the platform. Twitter makes money by selling public information. Here the public data is sold in 2 levels of access i.e premium and enterprise. Twitter is making money from other sources such as service fees collected from MoPub.

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Twitter business model

The Twitter business model is similar to other social networks i.e Facebook, YouTube, etc. It needs users to create an account and then post updates or tweets. Also, share videos, images through tweets.

  • User  – Users can share their interests or opinions with the world. Get real-time content and interact with their favourite celebrity through tweets.
  • Advertiser – Get the instant viral global reach and connect with target audience real-time.
  • Data partner – Access and analyse public data. Use this data to generate insights.
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Future of Twitter

Twitter Business Model is facing a few major issues such as small user base, less user engagement and negative profits. The social platform is not earning enough products. Rather it’s having negative products. If the business model doesn’t change or tweaked, the losses will remain constant. Twitter can make money by introducing an annual subscription. Also, adding value-added services can bring good profits to Twitter.

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Conclusion

Twitter is well-known as “Micro-Blogging Site”. It means everything is short and sweet. Also, users can connect with others and explore new things every day. Twitter is earning revenue in two ways – advertisements and data licencing. It’s no secret, Twitter is earning better revenue from advertisement. Simply put, Twitter is earning  85% of annual revenue by promoting other businesses through ads. Also, as mobile users are increasing every day, 65% of revenue is generated from mobile users.  On the other hand, data licencing is generating 13.5% of annual revenue. Small and large businesses can dive deep into public data and tailor their ad campaigns accordingly. Hence businesses can reach the target audience in the best way.

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