After ad revenue drop, Twitter tells investors it’s eyeing subscription options

After reporting Q2 earnings that showed a marked dip in ad revenue, Twitter has said its exploring alternatives — dangling the possibility of a subscription option.

Earlier today the social media giant reported ad revenues of $562M, down almost a quarter (23%) on a year ago — saying that the pandemic and “civil unrest” leading many advertisers to pause campaigns had both contributed to the decline. While the US, its biggest market, saw a drop of 25% in ad spend.

Twitter CEO Jack Dorsey told investors it’ll likely run subscription “tests” this year (via CNN), though he also said the bar for charging users for aspects of the service would be set “really high”.

So presumably it’s not considering a ‘your first ten tweets are free’ style pay-to-tweet model.

“We want to make sure any new line of revenue is complementary to our advertising business,” CNN reports Dorsey remarking during the investor call. “We do think there is a world where subscription is complementary, where commerce is complementary, where helping people manage paywalls… we think is complementary.”

The prospect of a paid version of Twitter — free from trackers, annoying ads and irritating algorithms which meddle with the clean chronology of the timeline — has been a holy grail for certain Twitter addicts since (basically) forever. So plenty of its most fervent users will be watching keenly to see exactly what Dorsey cooks up.

We’re spitballing here — but perhaps Twitter could charge, er, certain high profile, high risk users billions of dollars per month for the privilege of tweet-threatening the rest of humanity… Just a thought.

Twitter casting around for ad revenue diversification looks interesting in light of broader digital privacy trends that have put the ad tracking industry under increasing (and increasingly awkward) scrutiny.

Certain adtech players and mechanisms are facing challenges under European data protection rules, for instance, while there are also moves afoot in California to further tighten the consumer protections introduced this year, under the Consumer Privacy Act, which could see more US users blocking the tracking industry’s access to their data.

Last week’s massive Twitter security breach also hardly throws a positive light on the company from a privacy perspective. Dorsey addressed the breach in remarks on today’s call, with CNN reporting he apologized to investors — admitting the company “fell behind” on its security obligations.

“We feel terrible about the security incident,” he said. “Security doesn’t have an end point. It’s a constant iteration… We will continue to go above and beyond here as we continue to secure our systems and as we continue to work with external firms and law enforcement.”

Read Full Article