Meta Threads: Advertising Brings Big Bucks
Key Takeaways
- With many brands moving away from advertising on Twitter, it makes sense to introduce a new, ad-friendly platform
- That platform could be Meta’s Threads, a text-based social media from the Instagram team
- 97.5% of Meta’s revenue comes from ads
One of 2022’s biggest tech stories was Elon Musk’s $44 billion takeover of Twitter. So far, it’s been a bit of a flop, with Fidelity valuing the company at $15 billion in May 2023. Oops.
Advertising revenue brings in serious money for social media platforms, with 90% of Twitter’s revenue coming from ads. But since Musk kinda ruined Twitter, its revenue has dropped by 59%.
Now there’s a new kid on the block — Threads. Meta’s new platform is ready to capitalize on Twitter’s downfall. Let’s find out more.
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What is Threads?
On July 5, 2023, Meta Platforms (formerly Facebook) introduced a new social media platform to 100 countries: Threads. It reached 100 million users within five days, making it the fastest-growing platform to date. Still, it’s not approved for release in the European Union until Meta smooths out its data protection policies.
Threads is a text-based platform where users can post short-form text, videos, and photos. They can reply to fellow users with likes, reposts, and replies.
All of this might sound very familiar. Well, litigious Musk has already thrown down the legal gauntlet, accusing Threads of using ex-Twitter employees for insider knowledge. Meta denies these claims, saying no ex-Twitter workers are involved in engineering Threads.
Meta’s Instagram team is behind the development of Threads, and the platform integrates directly with Instagram. Currently, users carry over their usernames to Threads, and they cannot delete their Threads account without losing their Instagram. Meta has acknowledged this oversight and plans on developing a solution.
At the moment, the iOS and Android apps offer full functionality, while the website isn’t quite what you’d expect from a $792 billion company.
Another key issue is how Threads operates on an algorithmic timeline rather than a chronological one, so important updates may be read days later.
Still, Meta has made it clear that it doesn’t plan for Threads to be a platform for news or politics, citing negativity. Facebook reduced its journalistic investment, and Twitter banned political ads until Musk took over, so it’s no surprise Threads is taking a similar approach.
Social media companies heavily rely on advertising for revenue, with Meta making 97.5% of their money from ads. The platform needs to be ad-friendly, and discouraging discourse around politics and current events might help.
Why did brands stop using Twitter?
When Musk took over Twitter, the brand safety team heads left, and he fired plenty of people responsible for moderating the platform. According to an April 2023 study, hate speech rose, and bots increased after Musk’s takeover. He’s also welcomed some controversial users back with open arms, from Andrew Tate to Donald Trump and far-right political groups.
That arena isn’t really where conglomerates want to be advertising, and 625 of Twitter’s top 1000 advertisers have left the platform, leaving a black hole in the company’s finances.
The bottom line
As Twitter stutters, a multibillion-dollar industry opens for those who can create a squeaky-clean, ad-friendly platform. Can Meta fill that space? We’ll have to wait and see.
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