4 ms·

This will get downvotes here, because many HNers somehow see value in Twitter. But I'm actually surprised that many people would bid on Twitter at anywhere clo

This will get downvotes here, because many HNers somehow see value in Twitter. But I'm actually surprised that many people would bid on Twitter at anywhere close to its current valuation of ~$17 billion. Here's one reason why: Go ask any major affiliate marketing network how they feel about Twitter traffic. Many of them have an outright ban on it - meaning it actually has negative value to their advertisers. It simply doesn't monetize nearly as well as the traffic from other social networks. Much like the average Android user is worth far less to app developers than an iOS user is, the Twitter user base is simply not worth much to people looking to monetize it. That's a huge problem when asking someone to justify a $17B acquisition price.

disgruntledphd2 10y ago
Means (and typically last-click based means at that) are surprisingly poor summaries of distributions. Even if the average for Twitter users is low, there are probably pockets of value for particular services. These are potentially not the kinds of customers these affiliate networks are interested in. Your Android point is rather different, given the wide disparity of Android devices. If 80% of Android devices are worth less than $10 per year, while 20% are worth $100 per year, and all iPhones are worth $100 per year, you'll have a much lower mean value for Android while also having a subset of very profitable users. As you may have noticed, I'm not a fans of means in the advertising world. On your point on Twitter's value, I see a lot of missed opportunity. It felt like they slowed down really early in terms of what they did (and specifically their success with their product changes). Their growth stalled at quite a low point (relative to other social networks/services), which made it hard for them to attract good people, which further compounded the effect. But then, I never used Twitter (and maybe that's the problem).
- downandout 10y ago
  >Your Android point is rather different, given the wide disparity of Android devices. I disagree that it's different. Of course there are pockets of both value and worthlessness everywhere, but overall the LTV of an Android user to developers and advertisers is a small fraction of that of an ioS user, and a Twitter user is worth (to advertisers) an even smaller fraction of the value of a Facebook user. At scale, averages are what count. >As you may have noticed, I'm not a fans of means in the advertising world. I did notice that, and I cannot disagree with you there. But currently, for many advertisers, last-click based means is the most efficient available attribution model, even though I agree that it's far from perfect.
  - disgruntledphd2 10y ago
    I don't think its efficient, just easy. It makes very little sense though. Do you attribute which beer you drink to the sign outside the bar? I think that its difficult to assess your premise under a last-click model, to be honest. When you look at the history of advertising, its very difficult to believe that a direct response (measurable by click) is actually the whole thing. I'm pretty sure I've never clicked on a Coca-Cola ad, but I have bought a lot of their product over the years. I mean, conditional on your experience with the value of Twitter users (for a particular set of clients/services) and a last-click model, I don't disagree with you, I just think that such a view of advertising leaves an awfully large amount of stuff out. Full disclosure: mobile attribution is hard, there is not standard or even dominant way of tracking views there (i believe) and so for some mobile-heavy/only advertisers better attribution methods are just a pipe dream at this point.
criddell 10y ago
Twitter is hurting affiliate marketing networks? I would say it's the other way around.
- TeMPOraL 10y ago
  When a parasite is damaging the host, both will say that the other party is hurting them.
mbesto 10y ago
Very curious to hear from the HN crowd - do people actually see high ROI on Twitter ads? I've personally conducted full scale Facebook ads for a consumer product company with great success (very positive ROI) but almost literally couldn't get anyone to buy product via Twitter ads. Where does that $2B in revenue come from!?
- Bedon292 10y ago
  I would suspect it might have something to do with promoted tweets and things which drive traffic to their twitter/website. These sites are paying for the traffic (which then earns them ad revenue) and seem to be happy with the results. I have seen very few ads for purchasable items on twitter, just lots of traffic driving.
  - deleted 10y ago
    [deleted]
- M2Ys4U 10y ago
  Ads aren't their only revenue stream - they also charge for better access to real-time (and archival) data - for example via Gnip[1], which they purchased in 2014. [0] https://gnip.com/ https://gnip.com/

disgruntledphd2 10y ago

Means (and typically last-click based means at that) are surprisingly poor summaries of distributions. Even if the average for Twitter users is low, there are probably pockets of value for particular services. These are potentially not the kinds of customers these affiliate networks are interested in. Your Android point is rather different, given the wide disparity of Android devices. If 80% of Android devices are worth less than $10 per year, while 20% are worth $100 per year, and all iPhones are worth $100 per year, you'll have a much lower mean value for Android while also having a subset of very profitable users. As you may have noticed, I'm not a fans of means in the advertising world. On your point on Twitter's value, I see a lot of missed opportunity. It felt like they slowed down really early in terms of what they did (and specifically their success with their product changes). Their growth stalled at quite a low point (relative to other social networks/services), which made it hard for them to attract good people, which further compounded the effect. But then, I never used Twitter (and maybe that's the problem).

downandout 10y ago
>Your Android point is rather different, given the wide disparity of Android devices. I disagree that it's different. Of course there are pockets of both value and worthlessness everywhere, but overall the LTV of an Android user to developers and advertisers is a small fraction of that of an ioS user, and a Twitter user is worth (to advertisers) an even smaller fraction of the value of a Facebook user. At scale, averages are what count. >As you may have noticed, I'm not a fans of means in the advertising world. I did notice that, and I cannot disagree with you there. But currently, for many advertisers, last-click based means is the most efficient available attribution model, even though I agree that it's far from perfect.
- disgruntledphd2 10y ago
  I don't think its efficient, just easy. It makes very little sense though. Do you attribute which beer you drink to the sign outside the bar? I think that its difficult to assess your premise under a last-click model, to be honest. When you look at the history of advertising, its very difficult to believe that a direct response (measurable by click) is actually the whole thing. I'm pretty sure I've never clicked on a Coca-Cola ad, but I have bought a lot of their product over the years. I mean, conditional on your experience with the value of Twitter users (for a particular set of clients/services) and a last-click model, I don't disagree with you, I just think that such a view of advertising leaves an awfully large amount of stuff out. Full disclosure: mobile attribution is hard, there is not standard or even dominant way of tracking views there (i believe) and so for some mobile-heavy/only advertisers better attribution methods are just a pipe dream at this point.

criddell 10y ago

Twitter is hurting affiliate marketing networks? I would say it's the other way around.

TeMPOraL 10y ago
When a parasite is damaging the host, both will say that the other party is hurting them.

mbesto 10y ago

Very curious to hear from the HN crowd - do people actually see high ROI on Twitter ads? I've personally conducted full scale Facebook ads for a consumer product company with great success (very positive ROI) but almost literally couldn't get anyone to buy product via Twitter ads. Where does that $2B in revenue come from!?

Bedon292 10y ago
I would suspect it might have something to do with promoted tweets and things which drive traffic to their twitter/website. These sites are paying for the traffic (which then earns them ad revenue) and seem to be happy with the results. I have seen very few ads for purchasable items on twitter, just lots of traffic driving.
- deleted 10y ago
  [deleted]
M2Ys4U 10y ago
Ads aren't their only revenue stream - they also charge for better access to real-time (and archival) data - for example via Gnip[1], which they purchased in 2014. [0] https://gnip.com/ https://gnip.com/