Why Twitter has an advertising problem

Fortune

Twitter ads aren’t giving retailers the bang for their buck compared to other online forms of advertising, the Wall Street Journalreported Thursday.

Earlier in the week, Twitter reported weak sales that it blamed on a « demand problem » for the direct-response ads introduced last year. According to the newspaper, the ads work by charging the company « only when users take specific actions: »

Giving advertisers the option to pay for these specific outcomes—instead of ‘engagements’ on Twitter like user retweets and favorites—made its ads more valuable to advertisers, Twitter said, but the change, instituted last August, contributed to its revenue shortfall.

Companies are turning to services like Facebook and Google instead of Twitter. And Twitter is taking notice. On Thursday, Twitter’s vice president of global sales said:

We will always make choices which optimize for advertiser value. That’s why we moved to a model that only charges advertisers for the…

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