Threads vs. Twitter: The Rise, Fall, and Revenue Prospects
The clash of the social media titans continues. Threads, Meta's new Twitter alternative, made a grand entrance with a surge of sign-ups, but just two weeks later, the platform experienced a significant drop in daily active users. Let's delve into Threads' rollercoaster journey, explore the challenges it faces in dethroning Twitter, and discover the potential ad revenue that has brands and advertisers intrigued.
Threads' Meteoric Rise
Threads stormed onto the scene on 5th July, offering users the convenience of signing up using their Instagram accounts, which boasts over 2 billion monthly users. The launch caused ripples, and within two days, Twitter's web traffic was down 5% compared to the previous week, as reported by the Journal. With Meta CEO Mark Zuckerberg openly expressing his ambitions to create a public conversations app with a massive user base, Threads set its sights on Twitter's long-held market position - and more importantly, the squandered potential for text based social media that Twitter never managed to crack.
Challenging Times for Twitter
As Threads aimed to carve out its niche, Twitter found itself grappling with internal turmoil under the controversial leadership of billionaire Elon Musk, who acquired the company in October. Disputable decisions, temporary tweet view limits, a membership-for-verification system and now a re-brand to X has rattled Twitter's community.
Threads' Unexpected Fall
Despite its explosive start, Threads' momentum took an unexpected hit, with Sensor Tower reporting a nearly 70% drop in daily active users since its peak on 7th July. The number of users dwindled from 44 million to approximately 13 million, and the average daily time spent on the app plummeted from 19 minutes to a mere four minutes. In stark contrast, Twitter, with around 200 million daily active users spending an average of 30 minutes per day on the platform, continues to reign supreme.
Missing Pieces
Threads' struggles can be partially attributed to the absence of significant features offered by Twitter, such as desktop functionality and the ability to search for topics, limiting its appeal and versatility.
The Promise of Ad Revenue
Amidst the turbulence, analysts foresee a promising future for Threads' ad revenue potential. If the platform manages to retain users, Bernstein estimates it could achieve a staggering £5 billion in annual ad revenue, matching Twitter's 2021 earnings. Morningstar projects Threads contributing between £2 billion and £3 billion to Meta's revenue annually from 2024 to 2027. Additionally, Evercore ISI's estimation of Threads generating £8 billion in annual revenue by 2025 has captured the attention of brands and advertisers alike.
A New Advertising Frontier
Brands are already contemplating the possibilities Threads presents as an advertising channel. With Meta's experience and deep pockets from successfully running Instagram and Facebook, advertisers envision a promising avenue to connect with audiences. Taylor Michelle Gerard, a senior executive at Blue Hour Studios, reveals that some clients are considering integrating Threads posts alongside TikTok and Instagram campaigns as part of sponsored deals with influencers, offering a strategic way to incorporate Threads into existing marketing efforts.
Conclusion
The Threads vs. Twitter saga continues, with Threads experiencing a rapid rise and an unexpected dip in daily active users. Its quest to dethrone Twitter faces challenges, but the allure of potential ad revenue from unlocking the potential Twitter never fulfilled keeps brands and advertisers intrigued. As Meta executives plan new features to keep users engaged, the future of Threads remains uncertain. With the ever-changing landscape of social media, one thing is certain—this rivalry is far from over, and we'll be eagerly watching to see how Threads' journey unfolds.
By Callum Hall, Social Account Director
