Study: Twitter can deliver 40% higher ROI than other media

Brief:

Twitter, the social-media app with 330 million users worldwide, can deliver a 40% higher return on investment than other media channels, according to third-party research cited by the company. In addition, Twitter’s promoted video ad format can be as much as 20% more effective in driving sales than other Twitter ad formats, per a statement provided to Mobile Marketer.
A dollar spent on a Twitter ad campaign delivered an average return of $2.70 among four brands studied by Dentsu Aegis Network, Carat Global and Data2Decisions. The four brands in the study included two major consumer packaged goods companies, an adult beverage maker and a global athletic fashion company.
Pringles, the potato chip brand owned by Kellogg, saw ROI that was 3x greater than average in a campaign appearing in the United Kingdom. Product-only campaigns on Twitter deliver a short-term sales ROI of about $2, compared with 30 cents for brand-only marketing on the platform, the company said.

Insight:

As user growth stalls, Twitter is making efforts to drive ad growth and reach profitability with a series of initiatives aimed at making the platform more brand-friendly, including increasing ad transparency and working more directly with brands to craft strategy. This new research suggests that Twitter has a place in digital marketing strategies when marketers understand how best to the leverage the platform.

While product-only campaigns delivered a short-term sales ROI of nearly $2, versus around 30 cents for brand-only marketing, product-focused marketing can backfire over the long term, as brand equity declines over time, according to D2D’s analysis. The best balance between product-focused and brand-focused ads on Twitter depends on the strategic objectives of each brand. But D2D’s analysis found that maintaining a balance of 70% product to 30% brand would deliver short-term ROI without losing long-term brand equity.

Twitter last week said it may report its first profit next quarter by being more cost-efficient, appealing to more advertisers and diversifying its revenue sources. Ad sales actually declined by 8% in Q3 2017 from a year earlier, but other revenue rose 22% during the same period, CNBC reported.

The company said its user base grew 4% from a year earlier, while also acknowledging that it had overstated its number of monthly active users for a few years. Between 1 million and 2 million users of third-party apps had been incorrectly included in its quarterly numbers since late 2014, The Washington Post reported. Last week, Twitter formed an in-house creative shop called #Fuel to help brands create content specially designed for its micro-blogging platform. The company faces particular advertising competition from Facebook and Google, which earn more than 60% of digital ad spend in the U.S., according to eMarketer.