Riding a wave of new users, improved advertising options and an embrace of video content by users and advertisers alike, Twitter’s revenue has leaped in Japan, helping lead the company to its first quarterly profit.
Earlier Twitter reported that sales in Japan jumped 34% in the last three months of 2017, compared with a year earlier, to $106m (€86.22).
In Japan, Twitter’s success in converting users into revenue — a problem that has vexed the social network since its founding. Investors and analysts, however, point to Japan-specific factors that may not be replicable elsewhere.
The company seems to be innovating at a local level instead of simply localising US services, as is common at other tech firms, said Ryo Sakai, a senior planner for the interactive media division at Asatsu-DK, Japan’s third-largest advertising agency. “I get the impression that Twitter has, in the past year or two, been responding flexibly to advertisers’ requests,” he said. At the same time, the company has attracted more eyes in Japan: User numbers rose to about 45m in October from about 40m just over a year earlier.
The reasons for that are complex, but ad industry executives say Twitter’s policy of allowing aliases and the idea of tweeting - sometimes translated as “muttering” in Japanese - allows Japanese users to express their opinions in a culture that tends to be outwardly reserved. “There is an ease to anonymity,” says Motohiko Tokuriki, chief marketing officer at Agile Media Network, which advises companies on the use of social media.
Twitter has moved beyond text and pictures, offering rich video advertising options and providing an alternative to rivals such as Facebook, says Shinya Kobori, manager for the Twitter group at Dentsu Digital, part of Japan’s largest advertising agency, Dentsu.
Facebook, which lagged home-grown rival Mixi in the early days of social networks, has failed to dominate Japan as it has in the US and Europe. Twitter makes $2.36 (€1.92) per Japanese user, compared with $5.97 per user in the US, according to data from the fourth quarter of 2017, nearly twice the $1.24 in revenue per non-US user overall.