Pay No Attention to Wall Street, Twitter is Fine

Posted 2 years ago, on the category: Blog by Chris Naff

Wall Street needs to calm down, Twitter (TWTR) is doing just fine. They beat their first quarter earnings and revenue estimates, and they’ve grown to the highest number of monthly average users ever for the social media platform at 255 million. Despite that, their stock price fell by 10% on the day they released the quarterly earnings statements. How can that be, given the company’s strong performance? Being analyzed by the wrong metrics, that’s how.

Monthly active users (MAUs) are the amount of unique users a platform has over a thirty day period. It’s a pretty straight forward metric; MAUs provide a solid basis for all social networks to be measured by, right? Well, not exactly.

“Active user” is a broad term because each platform gets to determine the definiton that best fits their purpose.

Facebook details their definition of MAUs below:

“…someone who has visited Facebook.com and logged-in (or been logged in) or who has taken an action with a Facebook feature (e.g. clicked ‘like’, etc…). If the user doesn’t do any of those things for 30 days, they aren’t considered an active user (and therefore are not monthly active users either).
If they only see social plug-ins across the web, even if those social plug-ins include social context such as friends’ photos, friends’ likes, friends’ recommendations, but doesn’t click anything, they are not an active user on Facebook.”

Twitter’s definition? “The team has identified an ‘aha moment’ when a casual user turns into an active user. That moment happens when users follow 30 accounts, and when one-third of the people they follow also follow them back.”

Google+ has yet to reveal what they consider an active user.

But it is the MAU count that many, from Silicon Valley to Wall Street, focus on. That’s a big mistake. Comparing MAUs of each platform is literally comparing apples to oranges. Unlike financial statements, there are no generally accepted principles in how social networks report their user data.

Additionally, each network is different. There is a different purpose for joining Facebook than there is Twitter, and because of that they are used differently. Bottom line, Twitter isn’t Facebook, so let’s stop comparing them so much, okay? Facebook is a network built on engagement. People love to engage by commenting on updates, liking photos, and sharing stories they like. Their News Feed Algorithm gives a lot of weight to engagement.

Twitter, not as much. The feed in Twitter is chronological. What you see happens in real time. Essentially, Twitter can act as a modern day news room (depending on who you follow). Millions of people first heard of happenings such as the death of Steve Jobs or the Boston Marathon bombing via Twitter. That’s huge. Because of that environment, many users who have a profile never even Tweet. They’re simply there to consume content.

Additionally, Twitter was the first network that provided great access to conversations happening across the globe. As a result, entire websites that serve as a curator of Tweets correlating to news, entertainment, sports, etc. In essence, Twitter is more similar to YouTube than it is to Facebook.

Twitter will continue to add new products within their advertising platform. One of the coolest new features that I’m most excited about is the ability for promoted (read:paid) Tweets to be targeted by languages. This means that if, for example, you need to reach hispanic customers, you can find those who Tweet in spanish and ensure that your Tweet is seen by the correct audience.

Knowing your audience is important, especially if you serve niche markets. Here in Florida, we can certainly attest to the strong hispanic presence, but the challenge for marketers at times is figuring out the best way to reach beyond language and cultural barriers. But Twitter is not alone in addressing this challenge.

This week’s FDMA event is going to be excellent. Jimmy Moscoso, founder and CEO of YPA Digital Marketing Agency, will be presenting 7 Multicultural Ways to Market to Hispanics. Originally from Cuenca, Ecuador, Jimmy will be speaking about what’s important inside hispanic culture, how to apply the latest digital marketing trends, and how to get acquainted with a culture that interacts and gets influenced by a modern word of mouth referral approach. You won’t want to miss it this event, register here.

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