A Roadmap for Success at Twitter: Copy Facebook

Many eons ago, I was in a focus group for Google’s biggest advertising competitor (a company called Overture, which was acquired by Yahoo). The moderator showed us numerous product ideas for the company – all very creative and novel – and then asked for our feedback. My response to each one was largely the same: I stared into the one-way mirror and said “copy Google.” Don’t try to reinvent the wheel, just follow the lead of a company that was clearly kicking your butt. Over the last few years, Twitter has struggled. They’ve changed CEOs. They’ve hired and fired senior executives. They’ve launched new features and made large acquisitions. The results have not been great. Twitter stock – once as high as $69 in early 2014 – is now at $17; monthly active users (MAUs) in the US have flat-lined over the last six quarters. To turn Twitter around, I’ve got a simply answer: copy Facebook. Facebook has done two things better than Twitter: create a compelling user experience, and create effective advertising products. Of course, it is easy to say “make your site better and make your ads work!” Actually accomplishing these things is much harder, but let me attempt to give Twitter a few hints. Create a Compelling User Experience Think of all the features Facebook has rolled out over the last few years designed to increase user engagement: “Trending” updates that encourage discussion of popular topics “Your Memories on Facebook” that encourage re-posting of old posts Integration of Facebook Messenger into the user interface Robust video hosting to encourage upload of videos, and “suggested videos” to get users to watch more videos. Constant tweaks to the overall user interface and the ranking algorithm Psychological studies to determine the impact, for example, of positive and negative news on user behavior. None of this is accidental; Facebook only makes changes when there is quantitative evidence that demonstrates a positive impact on user engagement and traffic. This is not to say that Twitter doesn’t test things – or, for that matter, doesn’t quantify their testing. What I don’t see, however, is any evidence that Twitter is increasing its user engagement. Consider these facts about Facebook versus Twitter: From Q3 2013 to Q3 2015, Facebook’s MAUs increased by more than 250 million globally, while daily active users (DAUs) as a percentage of MAUs increased from 61 percent to 65 percent. So that’s huge user growth and simultaneous user engagement growth. During the same time period, Twitter’s MAUs increased by 75 million, but DAUs were flat (note: Twitter does not release DAU data, but it appears their number is between 22 percent and 34 percent, depending on the source). Twitter lags behind Facebook in both growth and usage. So my recommendation to Twitter is simple: deliver a product roadmap designed to increase MAUs and DAUs (user growth and user engagement). Quantify everything you do with these metrics in mind. Or put another way, copy Facebook. Create Ad Units That Work The conventional wisdom used to be that advertising on Facebook worked because of the rich psychographic and demographic data Facebook had about its users. That data is still valuable, but the real catalyst of Facebook’s ad growth has come from first-party data uploaded by advertisers. Through Facebook’s Custom Audiences tool, advertisers upload their customers’ email addresses, and Facebook’s algorithm finds “lookalikes” similar to that advertiser’s customers. Additionally, Facebook discovered that “right rail” ads – ads floating next to the main content – under-performed relative to “sponsored posts” embedded in the content itself. In other words, Facebook started with one assumption (demographic-driven, right-rail ads), and through testing found that another model performed better (first-party-data-driven, embedded ads). And, of course, the numbers have been fantastic. Facebook’s US and Canada ARPU is at $10.49, an increase from $4.85 in Q3 2013. Twitter’s US/Canada ARPU has gone from $2.65 in Q3 2013 to $4.98 in Q3 2015 – good growth, but still behind Facebook in both ARPU growth percentage and ARPU itself. Twitter is testing new ad units – indeed, they even rolled out “tailored audiences” that seem awfully similar to “custom audiences.” So it may well be that Twitter is copying Facebook (which I applaud). Still, $4.98 versus $10.49 is a huge difference. My recommendation: copy Facebook even more! The Difference Between Being Different and Being Good Leaders often feel that “being different” and “innovating” are required to be regarded as successful managers. That was my sense from talking to the folks at Overture 10 years ago; copying Google was somehow seen as acknowledgement of defeat – they didn’t want to hear that their innovative ideas weren’t going to work. I have no insider information as to whether such attitudes exist inside Twitter. All I know is this: like Google during the early days of search engine marketing, Facebook is the clear leader in social media. Facebook is adding more users, getting those users to engage more frequently, and making more money from each user. I get that Twitter and Facebook aren’t identical services, so this isn’t as much of an apples-to-apples comparison as Google and Overture. But if it isn’t apples-to-apples, it’s at least Granny Smith to Red Delicious – close enough that Facebook’s strategy, products, and growth is a very good collective benchmark against which Twitter should measure itself. Learn from Overture’s missteps and, please, copy Facebook! David Rodnitzky (Twitter: @Rodnitzky) is the CEO of 3Q Digital.

Social Pro Daily

A Roadmap for Success at Twitter: Copy Facebook

Facebook has done two things better than Twitter: create a compelling user experience, and create effective advertising products.

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