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Meta’s Threads could lure ads from Twitter but it’s early days, analysts say

Meta’s Threads could lure ads from Twitter but it’s early days, analysts say

In a bold move to rival Twitter’s dominance, Meta Platform’s Threads has emerged as a promising social media platform with the potential to lure advertisers away from the established microblogging giant. Launched on July 5, Threads quickly gained traction and surpassed 100 million users, marking the first significant threat to Twitter’s supremacy. While it experienced a temporary drop in downloads and engagement following its much-talked-about debut, analysts foresee substantial advertising opportunities for Threads, provided it can retain its user base.

Notably, Threads is yet to open its doors to ads, but industry experts predict substantial ad spending on the platform if it manages to sustain user interest. Bernstein, a prominent research firm, estimates that Threads could achieve an impressive $5 billion in annual ad revenue, matching Twitter’s 2021 earnings. Morningstar analysts suggest that Threads could contribute between $2 billion and $3 billion to Meta’s yearly revenue from 2024 to 2027, while Evercore ISI analysts are even more optimistic, projecting a potential $8 billion in annual revenue for Threads by 2025.

Given Meta’s financial resources and experience with running successful platforms like Instagram and Facebook, advertisers are hopeful that Threads will flourish and eventually introduce advertising opportunities. As a result, some brands are already considering incorporating Threads into their future marketing campaigns alongside TikTok and Instagram, especially in collaboration with influencers.

Notably, some advertisers have already shifted their focus away from Twitter due to concerns about the platform’s tone of discourse and sudden policy changes following Elon Musk’s acquisition of the company. Twitter has faced declining ad sales, and Musk himself acknowledged a 50% drop at some point, prompting the platform to reach out to major ad-buying firms with attractive incentives.

Despite Threads’ promising growth, it still has a long way to go to match Twitter’s reach, as Twitter reported nearly 240 million monetizable daily active users as of the previous year. Meta CEO Mark Zuckerberg has indicated that the company would only consider monetizing Threads once it reaches 1 billion users, suggesting a focus on enhancing its user base before fully tapping into advertising potential.

Threads’ current limitations, such as the absence of direct messaging, hashtags, or keyword searches, restrict its appeal to advertisers and limit its real-time event tracking capabilities that users often enjoy on Twitter. Nevertheless, brands are keen on experimenting with Threads, as it offers a fresh and enjoyable social media experience, reminiscent of Twitter’s early days.

Meta’s recent investments in upgrading its AI capacity for Facebook and Instagram have contributed to a significant 8% increase in quarterly revenue to $31.1 billion, making it the company’s best growth in six quarters. The ongoing focus on improving Threads’ core features and user retention will likely pave the way for further developments and potential monetization.

Threads has emerged as a serious contender to Twitter’s dominance, promising an enticing opportunity for advertisers. As Meta continues to nurture the platform and expand its features, advertisers are eager to tap into Threads’ potential and reshape the social media landscape. While it still has ground to cover in matching Twitter’s user base, Threads’ meteoric rise, and Meta’s strategic investments indicate that exciting times lie ahead in the world of social media marketing.


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