ADOTAS – Twitter President of Revenue Adam Bain noted at the Ad Age Digital conference in April that 80% of Twitter’s 600 advertisers were repeat customers — and some of the names are pretty impressive: McDonalds, Starbucks, Verizon…
But 600? That’s it?
Strangely enough, the microblogger gets repeat business from major companies such as McDonald’s because advertisers are finding it to be great for branding — but as Facebook and Google will tell you, it’s the multitudes of smaller, local advertisers that will continue driving online ad revenue.
Except those may be Twitter’s non-repeat customers, as Investors.com had not one but two stories suggesting smaller advertisers have not been impressed with Twitter products. The main complaint? Lack of ROI.
The money quote comes from Hillary Bresser of .Com Marketing: “For a lot of small and medium-size businesses, if they spend $10,000 to $30,000 on a campaign they need to see a 4% to 5% return, and some require an 8% or 9% return (from direct sales).”
That sounds pretty reasonable — perhaps the recent addition of geotargeting will bring back some of these scorned SMBs to Twitter’s ad products. Also, the company is introducing a “Beta Partnership Plan” tailored toward SMBs that would require a (negotiable) $15,000 minimum spend over three months.
I’ve been noting recently that Twitter’s revenue prospects aren’t very promising, especially considering the microblogger’s massive valuation. While geotargeting and SMB advertising plans are a start, Twitter really needs to figure out a way to bring in the local dollars — it could completely change the company’s revenue outlook.