How Does Twitter Make Money – Two Biggest Revenue Streams

Twitter, one of the most influential social media, was started as humble micro-blogging social media platform. Apparently, it has been growing as one of the biggest social media with strong influence around the world. In fact, the value of this company has exceeding $20 billion. Of course, it is very interesting to figure out how does Twitter make money and become such a big company while it actually doesn’t require the users to pay for signing up as it is completely free. Let’s learn about the two main categories of the Twitter’s revenue streams. These two include data licensing and on-site advertising.

How Does Twitter Make Money: Twitters’ Revenue Streams

1.    Data Licensing
Data licensing or also known as Firehose data is a particular revenue stream that allows Twitter to make money through licensing out the data from more than 230 million users. However, this data only refers to data that can be accessed publicly. This particular data is known as Firehose.

2.    On-Site Advertising
This is the biggest revenue stream on Twitter. Over the years, Twitter has been known as a valuable and effective marketing tool. This is basically the reason why a lot of companies are willing to pay a lot of money to use Twitter to advertise their products. To accommodate this need, Twitter offers three different advertising forms that can be accessed through mobile apps and social network’s website.

Promoted Tweets are the biggest revenue stream on Twitter. It defines for tweets that are promoting a company or a product. Twitter will put these promoted tweets into the users’ timelines. But Twitter doesn’t just only insert it. Instead, Twitter performs analysis first before determining the targeted users based on location, demographics, profiles and also the device that is being used. Usually, companies do not pay flat fee. Instead, they pay variable fees depending on the number of “retweets” and “clicks” of promoted Tweets. Therefore the more clicks and retweets, the higher fee is that the companies have to pay. Apparently, it can be a costly digital marketing but also the most effective one. 

How Does Twitter Make Money
The next way on how does Twitter make money is through Promoted Accounts. It means that the companies pay Twitter to promote the companies’ Twitter profile. This is usually done to gain more followers. Usually, Twitter works by suggesting the companies’ profiles in the users’ timeline. The suggestions are decided through algorithm that involves common demographics. Therefore, the companies’ Twitter profiles only appear on certain users based on their profiles.

Promoted Trends are other ways that Twitter do to make money. If you are an active Twitter user, you certainly notice the presence of the Promoted Trends. It is usually located along the sidebar. It can be on the hashtag form or not. Also known as Trending Topics, it gives good idea to the users on what new items and stores that currently generate the buzz. Usually, the company pays for the promoted trends for certain length of time depending on the need. Through these steps, it is no wonder that Twitter can generate a huge amount of revenue.

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