Twitter Inc. no longer wants to be the “world’s biggest social marketplace.”
The social network is shifting away from adding a Buy button that let consumers buy directly on its platform, a source familiar with the social network’s plans tells Internet Retailer. Instead, Twitter is shifting its resources to dynamic product ads, the retargeting ad format that shows a user product images based on what she looked at on a retailer’s site or app. When the user clicks on the ad, it takes her to the retailer’s website.
To be clear, Twitter isn’t abandoning the Buy button. Retailers that use BigCommerce Pty. Ltd., Demandware or Shopify Inc. e-commerce platforms to sell via Twitter’s Buy Now button can continue to insert the direct-buying feature into their tweets and Twitter ads. However, Twitter is no longer building new technology for that product, the source says.
“We made a change several months ago to increase our investment in commerce by moving fully into dynamic product ads after seeing the great early results,” says a Twitter spokesman who notes that the ads have produced roughly twice the click-through and conversion rates of other ads.
Still, the decision to pivot away from Buy buttons is a marked shift for a social network that in September told Internet Retailer it had big ambitions to turn Twitter into a social commerce hub where retailers could connect directly with, and sell to, consumers, especially those on smartphones.
A telling sign of Twitter’s changing focus is that Nathan Hubbard, Twitter’s head of commerce who spearheaded those efforts, has left the social network, as has Jana Messerschmidt, its vice president, global business development and platform.
The source says Twitter is hardly alone in struggling to generate sales on its platform, noting that Facebook also shifted its attention away from sales directly on its platform to ads that drive consumers to a retail site. Those ads, which can appear in users’ mobile or desktop news feeds, let a retailer upload their product catalog to Facebook. They can then set rules to enable the social network to automatically target consumers with ads featuring the products that a shopper may be interested in.
Sucharita Mulpuru, Forrester Research Inc. vice president, principal analyst, says that Twitter’s decision reflects the fact that Buy buttons simply haven’t been compelling to shoppers. “Advertising is a much bigger and more promising revenue stream,” she says.
Lou Kerner, a partner with angel investor firm Flight.vc, agrees that Twitter should pursue other paths. “The best strategy Twitter can deploy is to ditch its 140 character orthodoxy and to try other products that could resonate with its users, attract new users and drive better engagement,” he says. Indeed, earlier this week Twitter announced that in the next few months it will stop counting user names and media attachments such as photos and videos toward the 140-character maximum length of a tweet. The move will enable retailers to add more content to their tweets.