Overseas, Twitter is user-rich but ad-poor

Twitter has yet to expand its foothold in many markets.
Getty Images/File
Twitter has yet to expand its foothold in many markets.

BERLIN — From Manila to Madrid, international consumers represent more than three-quarters of the 232 million people who regularly use Twitter.

The problem is, Twitter is still figuring out how to make money abroad. The company got 26 percent of its total revenue from markets outside the United States in the third quarter, compared with around 17 percent at the end of last year, according to regulatory filings.

Turning global popularity into international ad sales remains tricky for the San Francisco company as it nears an initial public offering of stock. Many overseas brands are more skeptical of social media advertising than their US counterparts, while Twitter faces stiff competition from local social media rivals like Line of Japan.


Twitter also has yet to expand its foothold in many markets. That includes the global debut of its self-service advertising system, begun in the United States in late 2011, which allows brands to buy ads without talking directly to a sales representative. The company plans to bring that system to a number of markets.

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“Twitter is not quite there yet,” said Oliver Eriksson, at the digital ad agency VML in London. He said the company must prove its advertising platform could reach international consumers. “They need to do it quickly to give brands confidence that Twitter can add value,” Eriksson said.

While its initial public offering is estimated to value the company at $12 billion, Twitter remains a relatively small player in advertising. It is expected to grab just 0.5 percent, or $580 million, of total spending on worldwide digital advertising this year, according to the research firm eMarketer; $6.4 billion that will probably be spent on archrival Facebook in 2013.

Many companies are looking to increase their advertising spending within social media. But analysts say Twitter’s small footprint makes it a harder sell.

Twitter had $2.58 in revenue for every 1,000 timeline views in the United States in the third quarter, compared with 36 cents in the rest of the world, according to regulatory filings. A timeline view is when users visit their own Twitter pages that show all their messages.


Still, the international figure has more than doubled since last year, while the US number has increased 50 percent, offering a glimpse of the potential.

Twitter’s affinity for mobile will help it internationally as much as it has at home. Unlike competitors like Facebook and Google that had to adapt desktop products for cellphones, Twitter has always been a natural fit for mobile. It earns more than 70 percent of its revenue from mobile customers. And as more advertising dollars shift into mobile, analysts say, Twitter will probably benefit from its track record of connecting brands with consumers.

“Users’ move into mobile has been faster than anyone could have imagined,” said Ross Sleight, at the mobile marketing company Somo in London.

However, in many of Twitter’s fastest-growing markets, like Brazil and India, persuading marketers to spend more on ads could prove a challenge. Many consumers in developing markets still use low-cost handsets that do not provide the same social media experiences as high-end smartphones.

Twitter has more than 15 offices around the world, and it has hired former Google and Facebook executives to lead its global advertising expansion.