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When Twitter presents its earnings on Tuesday to Wall Street for the third time as a public company, it may be a long chat.
The company had a busy second quarter. It shed, then reshuffled, several top executives; it bought a fleet of ad-tech companies; and it intensely watched a World Cup. Twitter has also been prepping new metrics for investors that it believes capture the value of its content beyond its own platform, according to The Wall Street Journal.
Twitter has been arguing to advertisers that it is a very different fruit from its juicy peer, Facebook, which just enjoyed a blowout quarter.
Twitter's ad business is also swelling, growing 125% year-over-year in the first quarter to $226 million. Ad revenues per "timeline views" -- a metric that measures how often users refresh their Twitter streams -- reached $1.44, a 95% hike.
But Twitter's user numbers aren't seeing the same increases. Analysts predict its monthly active users for the quarter will fall between 260 and 267 million, representing growth of 19% to 22%. Even with the high-end estimate, the annual growth rate would dip -- and hit just one-fifth of Facebook's total.
Shiv Singh, senior VP-global brand and marketing at Visa, said Twitter has "immense potential," but most marketers fail to grasp it.
"People who think of Facebook and Twitter as being in the same categories are underestimating both," he said. "I need a chair to sit on and a desk to put my computer on. I don't need two chairs."
Twitter's best case for differentiation is with colossal live events. Next to Facebook, it is a superior conversational medium, and so, a better space for real-time marketing, several marketers claimed. It is morphing into a media portal, where people turn for news and to explore their interests. And it is beefing up its tools for targeting these consumers, including its Tailored Audiences program and Crashalytics, its mobile-app dashboard.
On mobile, Twitter has taken significant strides. During the quarter, it acquired two mobile-ad companies, Namo Media and TapCommerce, to strengthen what the company calls its "off-Twitter" strategy. MoPub, the mobile exchange Twitter owns, handles over 130 billion ad requests a month, and powers ad-buying across hundreds of apps. Several marketers believe Twitter will soon integrate its data into these apps, deepening the company's ad reach.
Twitter declined to comment.
"If you can use that data to better track users, then you make up for quantity with quality," said Ian Schafer, CEO of digital agency Deep Focus.
Still, quantity matters. Twitter's best stab at growth came with the World Cup. It marked the first major global event with Twitter as an established platform.
Advertising seized upon the matches, which inspired 672 million tweets. Fans, as well as plenty of marketers latched on to explosive moments, like when Uruguayan Luis Suarez sunk his teeth into an opponent. Twitter also moved aggressively to tap the games, unveiling a promotional campaign and slate of new features to reel in new users and engage dormant ones.
On Tuesday, Twitter desperately wants to show a bump in user growth from the games, which began during its second quarter, in June, but extended into the next quarter.
But Twitter knows a World Cup doesn't come around every quarter. It will need to push for smaller, regional events to generate interest from users and advertisers. The question for the platform, said Mr. Schafer, is "how much will advertisers spend to make those events happen?"
Middle-aged users pose a challenge
As a media platform, Twitter has struggled where Facebook has flourished: obtaining middle-aged users. Marketers hope the company's new products, such as Twitter cards, its growing rich-media unit, can draw in this higher spending demographic, who often find the platform foreign. Amplify, Twitter's bid to rake in revenues from traditional TV advertising, has had mixed results in its early stages.
Multiple marketers also expressed frustration that Twitter is overly beholden to its users -- if Twitter tweaks its service and users gripe, the company behaves sensitively; Facebook doesn't.
The World Cup results could point to another distinction from Facebook -- but a bittersweet one for Twitter. A fan in Brazil may have tracked the matches on Twitter, without ever logging in. A similar problem arises with the millions of tweets that appear on websites outside Twitter, where there's no way to measure eyeballs or earn ad dollars.
"The impact of Twitter is much bigger than their user base," Mr. Singh noted. While it is plausible that Twitter could integrate its paid products -- and demographic targeting tools -- into its far-flung content, many marketers and agency executives do not expect that to happen. That means they will have to rely on Twitter to expand its engaged ranks -- or get comfortable with its size.
"They think they can crack the nut on non-active users in a way that's similarly targeted" said Zach Pentel, director of digital strategy at BBDO NY. "They haven't told us how they're going to do that."