Twitter Makes a Play for Performance Ad Budgets and Indie Agencies

Twitter may be a cultural touchstone, but it’s long trailed other social platforms in terms of ad dollars. Marketers typically use the platform as a place to raise brand awareness, but not as a place to drive lower-funnel conversions like web traffic or purchases, known as performance marketing, which has helped competitors Amazon, Meta and Google dominate. Now, as a way to charge growth and insulate future ad revenue, Twitter is trying to change that. In 2020 the platform rolled out its first performance marketing products. This year it launched a dedicated team supporting performance-based marketing campaigns and independent agencies. Twitter aims to eventually have 50% of its revenue from performance, whereas currently, the lion’s share of sales comes from brand marketers, said Doug Brodman, director of North America, agency and platform solutions at Twitter. “I would say that the ultimate goal is to have both of these arms of the company driving considerable contribution to the revenue and having it more balanced where we're not heavily weighted on one versus the other,” Brodman said. Twitter’s performance initiative is opportune at a time when marketers want to know their investments are useful, especially in an inflationary environment where every dollar counts. Brand marketing initiatives, which have long been Twitter’s focus, are less potent at swaying purchase decisions. Moreover, advertisers are scrutinizing their digital ad spend now more than ever, as cookie deprecation undermines the industry’s long-standing business model and dampens the effectiveness of titans like Meta, giving Twitter an opening. But it’ll be a challenge for the performance marketing upstart: there’s the potential acquisition by Elon Musk, who simultaneously has denounced advertising and called out bots on the platform as perpetuating ad fraud. And, Musk or not, several agency sources told Adweek the platform has a long way to go before it can start chipping away at the incumbents. eMarketer projects the social platform will only have 4% market share among social network ad spend in 2022. Performance products Since late 2020 Twitter has introduced a suite of performance tools aimed at making its ad formats better at driving conversions. One group of tools tailors ads to specific outcomes, including conversions, app purchases and site visits. In a test where a brand used Twitter's ad to drive site visits, it outperformed existing Twitter offerings and reduced cost-per-site-visit by 31%, per Twitter data. “If you can get people to the site at a more cost-effective rate, you can convert them at a more cost-effective rate,” said Avi Ben-Zvi, vp of paid social at Tinuiti, who said products such as this help put the platform on equal footing with its competitors. Another tool exciting advertisers is dynamic product ads, slated to launch later this year, which will let brands customize creative based on a product’s relevancy to a Twitter user. “DPA is going to really take shape and allow us to not have to be so in the weeds of updating creative, which can be a really heavy lift,” said Lisa Reid, group director of paid social at WPromote, noting that letting the algorithm pick who is the right fit for a particular product is easier for advertisers. A final group of products is focused on shopping, as all platforms try to cash in on the growth of ecommerce. Last month, Twitter announced Product Drops, which lets people receive notifications when merchants release new products and features an integration with Shopify. The platform in March unveiled Twitter Shops—dedicated spaces for merchants to share products. A Volatile Future for Advertisers on Twitter Incentivizing indies Besides new products, Twitter’s push into performance marketing includes developing relationships with performance-focused agencies, which differs from a previous focus on holding companies, which the platform already has strong relationships with, Brodman said. By focusing on independents, Twitter unlocks more clients, especially because the smaller businesses that smaller agencies are more likely to represent tend to devote more of their budgets to performance than brand marketing, which is more cost effective. Earlier this year, Twitter reached out to performance agency Wpromote asking about its successes, challenges and how the platform could help. It introduced Wpromote to its new products, some of which were still in beta. “Any time we have questions, any time we need any help with education, they're there,” Reid said. Several of Wpromote's clients are keen to try Twitter’s new tools. The platform isn’t just engaging performance-oriented independents. It’s had a longstanding relationship with Horizon Media, the largest independent media agency in the U.S., and this year it lets the agency use its new products, touting trend and timeline takeovers and offering incentives for the media agency to increase its performance investments. If a Horizon client grows Twitter spend by 15%, that client is then rewarded by Twitter in the following quarter with complimentary impressions and media totaling between 2% and 3% of spend. For Horizon, the decision to use those products was all about growing individual accounts and in turn, growing the agency. “We were able to overlay those incentives with our agency partnership growth incentives, so it was almost like a double-dip for accounts that were leaning into performance,” said Alex Stone, svp advanced video and agency partnerships at Horizon Media. Playing catch up Despite these strides, multiple sources said Twitter’s performance operation still lags behind competitors, even upstarts like TikTok. Kevin Renwick, media director at Mekanism, a performance agency that was independent until it was acquired by Canadian holding company Plus Company last month, said he’ll have to see more case studies before he trusts Twitter’s products, adding that the platform's outreach lags behind competitors. “Twitter feels very disengaged compared to the rest,” Renwick said. “When TikTok was still a small player, they were really responsive. They were very good at hand-holding.” Jon Morgenstern, director of investments at VaynerMedia, said Twitter’s technical performance capabilities still trail TikTok’s, which are themselves still much greener than heavyweights like Meta. “There's a lot more potential energy in what they're talking about than like, ‘oh, damn, Twitter Ads Manager is all tricked out performance-wise now,’” he said. Despite this, Twitter’s importance to the zeitgeist still makes it relevant for advertisers, who aspire to move at the speed of culture and take advantage of the platform's ability to facilitate conversations. “They are really leaning in to how to take that conversation, and bridge it, and enable brands to use that conversation to drive that low-funnel conversion and that low-funnel performance,” said Reid. Twitter, Shopify Reveal Partnership at Cannes Lions