Why Twitter's Signup Process Is A Huge Drag On Its Ad Business

Nihal MehtaLocalResponse’s Nihal Mehta.

Twitter is hoping its new “interest targeting” ad product — which allows advertisers to aim promoted tweets at people with relevant interests — will improve the performance of its ad products, but it likely still leaves the microblog platform trailing Facebook in its ability to serve ads in the most relevant way possible.

The reason is that the sign-up process for Twitter asks for very little information from users — a name and an email address — compared to Facebook’s. On Facebook, people end up punching details of their entire lives into their accounts. On Twitter, people use fake names and say whatever they want.

Advertisers on Facebook can easily target people by location, gender or education. But Twitter advertisers must guess who users are or what they’re interested in.Twitter’s interest targeting system is, therefore, a “massive reverse engineering problem,” according to Nihal Mehta, CEO of LocalResponse, an ad firm that targets social media users with shopping messages. The problem may explain why Twitter is taking so long to create its new self-serve advertising API, which was promised in 2011 but still hasn’t quite arrived.

Mehta, of course, has a vested interest in Twitter’s targeting platform: LocalResponse’s raison d’etre is to monitor users and serve relevant tweets at them in seconds if they say anything about shopping. The better Twitter gets at targeting, the more it competes with LocalResponse.

Nonetheless, he raises a good point: For Twitter to grow its ad revenue, it needs to serve high-performing ads, and it’s difficult to target those ads properly if the sign-up process doesn’t give Twitter any data on its users.

We left a message with Twitter asking for a comment but didn’t immediately get a reply.

“Facebook is a good year ahead of Twitter” when it comes to targeting, Mehta estimates. “But the fact that Twitter mobile revenues are reported to be greater than Facebook’s is an early indication of their potential for success, and we’re already seeing signs of them being more aggressive as they continue to roll out new targeting opportunities every week to take advantage of their own unique data sets.”


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