Meta’s Threads: How Ad Features Are Transforming Twitter Revenues
Threads, a new social media platform launched by Meta Platforms to challenge Twitter, is being seen as less controversial and more predictable by certain advertisers, according to Reuters.
Industry analysts believe Threads has the potential to attract marketing budgets away from other platforms in the long run. Since its launch on July 5, Threads has rapidly gained 100 million users, making it the fastest-growing social media platform and a genuine contender to Twitter’s dominance in microblogging.
Elon Musk, CEO of Twitter, responded to Threads’ success by announcing Twitter’s plans for a rebranding and logo change, possibly to an X symbol.
Despite a slight decline in downloads and user engagement in the subsequent week after the launch, analysts remain optimistic about Threads’ advertising potential, especially if it can retain its user base. Projections for ad spending on Threads are ambitious, with some suggesting it could generate annual ad revenue of $5 billion, equivalent to Twitter’s earnings in 2021.
Morningstar analysts estimate that Threads could add between $2 billion and $3 billion to Meta’s revenue annually between 2024 and 2027, while Evercore ISI analysts project that it could generate $8 billion in annual revenue by 2025.
Brands are already considering including Threads posts in their marketing campaigns alongside TikTok or Instagram posts as part of sponsored deals with influencers.
Once Threads introduces advertising, some brands may shift their ad spending from Twitter to Threads without hesitation, according to industry executives.
Meta Platforms did not provide any comments on the matter.
