How does Twitter Make Money?
Twitter is one of the most sought-after social media sites at this time. Users can make networks by writing tweets using this platform from a smartphone or laptop/PC. Because of the fact that Twitter does not cost money from subscribers, it is not clear at first sight how this platform makes a profit.
What Is Twitter?
The tweeter is a website that is a platform for microblogging which was launched in the year 2006. Initially, it was a platform for SMSs which had a limitation of words for its tweets to 140 characters. In the past 10 years, this platform has become one of the most sought-after social media sites.
The users who have registered accounts can write, send, like, or retweet the tweets but the users who have not registered are only allowed to read those posts.
This social media site is only 15 years old and has over 300 million active registered users who are active in a period of one month.
HOW TWITTER MAKES MONEY
Twitter income sources are segregated into two groups- advertising services and data licensing.
Advertising Services
Twitter put forward ad services with the help of its promoted products:
Promoted Accounts
Twitter recommends new accounts to follow on grounds of users’ interest, location, and previous activities. To be more visible and generate more followers, numerous users give payment to Twitter for the promotion of their account in the recommendations, thus, Twitter receives payment from this.
Promoted Trends
A subject is said to be trending on this platform on grounds of the number of tweets on that particular topic and related keywords in the tweet. When any subject receives a sudden rise in its popularity, it is considered trending on Twitter. Businesses can use these trends by sponsoring Twitter for promotion related to products and services of the brand during a trend.
For instance, at the time of the National Football tournament, they may make payment to Twitter for promotion of the Super Bowl at the time of the tournament, or at the time of a special match or big game in particular.
Promoted Tweets
Twitter may even recommend tweets, which are shown on the users’ timelines as “promoted”. Twitter promotes the tweeters based on the activities and internet of the particular user thus these are customized based on the activity log of users.
The greater number of promoted tweets consumed by users is proportional to the revenue of tweeter.
Data Licensing
This feature makes up to be the second most crucial source of income. Apart from its public app program interface, this platform trade subscriptions to public data to business organizations and developers looking forward to finding and analyzing real-time and data history on Twitter.
There are two methods by which this platform makes money from data licensing:
- Mobile advertising exchange services: This platform provides services to these mobile ad services via the MoPub exchange. Mopub is a Twitter feature that provides paid solutions to mobile app developers.
- Provision of data insights: The organizations that have partnerships with Twitter or those that have subscriptions to premium APIs have access to look and study data history and real-time data found in public tweets.
Key Metrics Twitter Uses to check the efficiency of its revenue model
This platform utilizes monetizable daily active users (mDAU) to prompt ads at a particular time, which aids in generating money. mDAU are businesses, people, or accounts that feature their advertisements on this platform.
Additionally, it utilizes ad engagement and user actions to generate income. Replying, retweeting, or following the sponsored accounts, or providing views to ads is all included in Ad engagement. Modifications in ad engagement aid Twitter analyze users’ reactions to advertising products or services.
Twitter’s Revenue
The thing is that Twitter is still in its growing phase when we consider the profile and it does make money. The major source of income is data licensing and advertising services like sponsored accounts, trends, and tweets.
In the year 2020, this platform generated an income of $3.7 billion, that is, an 8.8% growth per year. *6% of this profit was generated from advertising services as per Business of Apps. Though the company claimed to be in an overall loss of $1.1 billion in that year, its target is to double the income by 2023.