As one of the most popular social media platforms in the world, Twitter has been used by millions of people.
People are sharing their thoughts, ideas, and opinions on it.
But have you ever wondered to know how does Twitter make money?
In this article, we will explore Twitter’s business model, Twitter Revenue Model.
Introduction to Twitter
Twitter is a social media platform that allows users to share short messages called “tweets.”
These messages can be up to 280 characters long and can include text, images, and videos.
Twitter was founded in 2006 and has since grown to have over 450 million monthly active users.
It has become an essential tool for businesses, politicians, celebrities, and journalists to communicate with their audiences.
How Does Twitter Make Money: Business Model
Twitter’s business model is built around advertising, data licensing, partnerships and acquisitions, and paid subscription services.
Let’s take a closer look at each of these revenue streams.
Advertising on Twitter
Advertising is Twitter’s primary source of revenue. The platform offers various advertising options.
These are including promoted tweets, promoted accounts, and promoted trends.
Promoted tweets:
Promoted Tweets are sponsored tweets that businesses pay to have appeared at the top of users’ feeds.
These tweets appear like regular tweets with a “promoted” label below the username.
Businesses can target their promoted tweets based on user interests, demographics, devices, locations, or keywords.
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Promoted accounts:
Promoted Accounts are like promoted tweets, but for accounts.
They allow businesses to get their accounts in front of more users who might be interested in following them.
These accounts are recommended to users based on their interests, location, and behavior.
Promoted trends:
Promoted Trends are sponsored hashtags that appear at the top of Twitter’s trending topics list.
They allow businesses to promote their hashtags to reach a wider audience.
Twitter’s advertising revenue is generated through a cost-per-engagement (CPE) model.
In which, advertisers only pay when a user interacts with their ad. This interaction can be a retweet, reply, like, or click.
Twitter’s Data Licensing
Twitter’s vast collection of data is also a significant source of revenue.
The platform offers data licensing services to businesses and organizations.
It provides access to real-time data on user behavior, sentiment analysis, and trending topics.
These data are used for market research, competitive analysis, and brand monitoring.
Twitter’s data licensing revenue is generated through partnerships with companies such as IBM, Salesforce, and Sprinklr.
These companies use Twitter’s data to provide insights and analytics to their clients.
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Twitter’s Partnerships and Acquisitions
Twitter has entered into partnerships with various companies to generate additional revenue streams.
Twitter has acquired several companies over the years including Magic Pony Technology in 2016 to improve its machine-learning capabilities.
Periscope was acquired by Twitter for $100 million of stock and cash.
The company’s largest acquisition was $479 million for the digital advertising platform TellApart.
In April 2022, business magnate Elon Musk initiated an acquisition of American social media company Twitter, Inc. and concluded it on October 27, 2022.
Twitter also has an Official Partner Program which includes companies like Cision, Khoros, and Synthesio.
Twitter’s Paid Subscription Services
Twitter has introduced paid subscription services, including Twitter Blue and Super Follows.
Twitter Blue is a premium subscription service. It offers features such as undoing tweets and bookmark collections.
It costs $2.29 per month in the US.
Super Follows allows users to charge their followers for access to exclusive content, such as tweets, newsletters, and live streams.
Conclusion
So, Twitter’s business model is primarily based on advertising.
With additional revenue streams such as data licensing, partnerships and acquisitions, and paid subscription services.
As Twitter continues to evolve and introduce new revenue streams, it will be interesting to see how the platform’s financial performance develops.
