Twitter Inc (NYSE:TWTR) has a strong a mass-market use case provided the micro-blogging site is able to “service easier to use,” says a report from MKM Partners, released on May 15, 2014, by analysts Rob Sanderson and Wendy Farina. According to the analysts, the problem is “less challenging” to fix “than to create a valuable, engaging platform that TWTR appears to be.”
About the survey
The above conclusion stems from the survey conducted by MKM Partners, which is the second volume of its proprietary study in collaboration with Wendy Farina/The MKM Intelligence Community. The main objective of the study was to get more insight into user engagement, growth potential and monetization opportunities for Twitter. The survey questioned 2,300 respondents of which 51% had active Twitter accounts.
Since this was only the second survey, identifying any trends was not possible, but “management was notably more committal to improvements beginning to have impact,” the analysts noted. Therefore, there was not much focus in the report on comparing the results to the last survey, and the analysts mentioned they would “call out trends” only after they have several data-points. Going ahead, analysts believe that the survey will be able to “provide valuable insights” on changing users views regarding Twitter Inc (NYSE:TWTR). The second volume included more questions compared to the first survey, asking feedback on user experience and reasons for attrition, which according to analysts, are the most significant issue for investors and the stock presently.
Twitter is a promising ad-platform
The survey indicated that Twitter Inc (NYSE:TWTR) has a strong mass-market use case. It was found that users are broadly distributed across age, Income and education levels. Around 56% of the respondents were aged 35+ and 27% were over 45 years. Income wise, 52% of the respondents were above the U.S. median, and 37% had a bachelor’s degree or higher. Interest categories were also well dispersed.
Twitter moreover emerged as a promising ad platform. The survey found that almost half of the respondents follow brands on Twitter Inc (NYSE:TWTR), while one-third of the users took part in sweepstakes and other promotions. Most of the respondents said that they never noticed ads suggesting a high tolerance for ads on the platform.
Among all the respondents, 13% have a Twitter account, but now are inactive. Of those, more than half of the users have not used Twitter in the last year. The survey also found that 45% of users did try a few tweets and then quit, while 13% were active less than one month. There were 26% of users who found Twitter difficult to use, while 14% complained that the platform has too much content.
MKM Partners have a Buy rating on Twitter Inc (NYSE:TWTR) with a current price target of $55.