Twitter's Big Job Cuts Fall Heavily on Ad Sales Team. Here Are Its Other Big Fixes

Twitter on Thursday said it would slash 9% of its workforce, mostly in its ad sales team, and look for further savings in its bid to turn a profit next year. The move comes as Twitter reported another quarter of declining revenue growth. Ad revenue grew to $545 million in the latest quarter, up 6% year over year, its slowest increase yet. Twitter remains a money-losing operation, dropping $100 million last quarter. The company has been pursuing a sharp recalibration of its business as social media ad budgets become more competitive. It now faces significant competition from not only rivals such as Facebook but also the likes of Snapchat and Pinterest, just as its own users have apparently plateaued. Among other responses, Twitter has sought video ad dollars by pushing aggressively into premium digital streaming with partners like the National Football League and Bloomberg. On Thursday morning, in its earnings call with Wall Street, Twitter executives laid out the strategy going forward. Ad sales overhaul The ad sales organization is consolidating into two channels instead of three. Twitter is folding its direct-response ad sales department into its main team, which handles the major brands and largest customers. The other sales team is for small businesses. Twitter's direct-response ads -- the ones that ask consumers to take some action, buy a product, sign up for a newsletter -- have always been a challenge for the company. Twitter is clearly now more focused on bigger brand campaigns, especially with video. Faster down the stream Twitter Chief Operating Officer Adam Bain said that the live-stream video operation is starting to attract the kind of budgets that Twitter needs: online video budgets. Without naming names, Mr. Bain said one major media holding company told him that Twitter is the only "feed-based" website where it is moving online video dollars. (The other "feed-based" site would be, ahem, Facebook.) Those are budgets typically reserved for platforms such as YouTube and Hulu, and Twitter thinks it has created an in with its football games, live news and other programs. Twitter's live-stream product, especially Thursday NIght Football, has gotten high marks for its sleek broadcast quality and TV-like commercial experience. Twitter said 70% of its audience for the games are under the age of 35. It reiterated that 3 million people have at least checked out an NFL game on its platform, although the average viewership statistic that one would use to compare its audience against TV is far smaller. Growing audiences Twitter is still not hooking users, which has been its biggest problem. It now stands at 317 million monthly active users, up 3% from last year at this time. That's far smaller than Facebook's 1.8 billion monthly users and below Instagram's 500 million. The still-hot Snapchat, moreover, says it has 150 million daily users, a measure that Twitter declines to divulge. On Thursday it said only that its daily users grew 7% year over year, an accelerated rate of growth. Keeping them interested Twitter identified five main areas where it is focusing to get more people coming back. First, it is now showing users customized timelines based on their interests, as determined by an algorithm, like Facebook. Second, it has more live content like the football games and presidential debates; 15% of people who've seen some of an NFL game or presidential debate on Twitter weren't logged in, suggesting that they were potential new recruits. Third, Twitter is developing more relevant push notifications to entice viewing. Fourth, it's trying to clean up harassment on the platform. And fifth, it is working on converting non-regular users who show up to view particular tweets into more regular users. Google DoubleClick progress One of Twitter's big moves this year was to integrate Google DoubleClick, meaning that advertisers could measure campaigns and buy Twitter ads through the search giant's ad tech. The program is only now starting to ramp up, and Twitter said it's on pace to handle $75 million yearly in ad spending. Twitter also said it has improved its ad auction infrastructure by reducing ad load times and improving consumer engagement. Video ads, in particular, were strong, representing the largest portion of ad revenue and the fastest growing segment.

Twitter's Big Job Cuts Fall Heavily on Ad Sales Team. Here Are Its Other Big Fixes

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