Many investors talk about Twitter (TWTR) and Facebook (FB) as if they are interchangeable investments but as these two social media platforms evolve, it is becoming clear that there are monumental differences between the two and these differences are precisely why investors in Twitter will experience revenue growth that outpaces that of Facebook.
Twitter’s year over year revenue growth in the most recent quarter was 124% while Facebook’s revenue growth stood at 60%. These quarterly reports are a hint of what’s to come as advertisers and users alike begin to realize the stark differences between Facebook and Twitter.
- Facebook is Social and Twitter is Media: Users go to Facebook to see photographs of their friend’s children, to find out what’s happening in the lives of their relatives, or to take a fun quiz that reveals where in the United States they should be living. These experiences are purely social and in the case of the quirky quizzes, an entertaining way to kill some time. The Facebook experience exists in stark contrast to the Twitter experience as Twitter provides users with a unique opportunity to find truly useful content in areas that are of specific interest to the user. These user experience differences are rooted in the timeline.
- Random Timeline vs. Targeted Timeline:Facebook’s timeline is a truly random experience due to the fact that your friends and relatives have diverse interests and what is an exciting post to them may not be of any interest to you. This causes the Facebook timeline to feel a bit muddled and disorganized; if it feels this way to us, it surely feels this way to advertisers. On the other hand, Twitter’s timeline is specifically targeted to your interests because the platform allows you to create it. Twitter helps you find the people who are posting the content that you are passionate about viewing. And in turn, allows advertisers to specifically target consumers based not only on their interests but on their passions.
- Content, Content, and More Content: Twitter is fast becoming a personal news feed for its users. It is a place where content consumers find content providers and where content providers find their audience. One example of this was the 2014 FIFA World Cup where rabid soccer fans around the world found each other and advertisers and content providers found an audience simply by typing #worldcup. There is remarkably useful content posted every day on Twitter about your occupation, your business, your hobbies, your politics, and most importantly, the things you are passionate about. Content is king in marketing and the Twitter platform is fast becoming the king of content.
- Your Voice is Heard on Twitter: Your friends might hear you on Facebook but the world might hear you on Twitter. Samsung (SSNLF) just released a Galaxy Note 4 commercial making fun of the Apple (AAPL) iPhone 6+. What stands out from that commercial is Samsung used tweets from random Twitter users to drive home the point that Samsung was first to release a smartphone with a larger screen (you can find the commercial here). Setting aside the free advertising Twitter received, this is clear evidence that Twitter is connecting consumers with the products they love; and more importantly, directly connecting the producers with the consumers. If this trend continues, it will be a growth driver for Twitter.
- The Mentor Factor: In every walk of life, you find people who credit their success to finding a mentor early in their career. This is especially true of entrepreneurs. But how do you find such a person who is willing to provide you with the roadmap to their success? Look no further than Twitter. Entrepreneurs and successful people from all walks of life are providing free advise to their followers on Twitter. Serial entrepreneur, angel investor, and co-founder of StockTwits, Howard Lindzon, can be found answering followers questions @howardlindzon , Co-founder of Twitter and founder of Square, Jack Dorsey can be found @Jack, marketing master Gary Vaynerchuk provides free weekly videos chock-full of marketing and business advise @garyVee, and Richard Branson co-founder of Uber links to his favorite articles using the hashtag #readbyrichard. These are but a few examples but they accent the unique opportunities afforded to all Twitter users and this is exactly the type of interaction that will drive user growth.
Twitter is a place were content providers and content consumers converge, it is connecting consumers to the products they love, and providing a platform for users to find the news that matters to them. For these reasons, Twitter experienced 2x the revenue growth of Facebook in the most recent quarter and this is a trend that is likely to continue.