Advertisers on Twitter Say it Needs Additional Users

For some of Twitter’s advertisers, 218 million users is not an audience that is big enough, That was their message to the social network, which on Thursday detailed its plans to have an initial public offering. The ad buyers want the service to become more mainstream prior to it getting mass-market clients.

Purchasers of ad space said the service, known for its limited character messages, would need a significant amount of new users, and a larger sales force, if it plans to win more mass-market dollars.

Since March of 2006, when the first message of 140 characters maximum was sent, Twitter has burst out to become a game changing tool of communication where news can be made and broken by ordinary citizens and public figures.

Twitter says it has 218 users that are active each month, that according to its filing on Thursday with the SEC. That amount is less than 20% of its rival Facebook’s 1.15 billion.

Nearly 22% of users of Internet in the U.S. are Twitter account holders according to online research company Forrester Research.

As a comparison, 72% of U.S. users of Internet check on their Facebook page at least once each month.

This issue is troublesome for Twitter, which heavily relies on advertisers for its revenue, as it attempts to raise more than $1 billion in its IPO. Advertising represented about 85% of the $317 million in total revenue for Twitter in 2012, said their filing on Friday. In comparison, Facebook reported that it earned over $4.3 billion from advertising during 2012.

In addition, the rate in growth of users is starting to slow. During the second quarter, growth at Twitter in monthly users who were active slowed to only 7% from the previous quarter, compared with 10% or as much as 11% growth over the three previous quarters.

Twitter has recognized it risk if it does not increase its active user base in its filing on Thursday, saying that could result in a loss of revenue due to losing advertisers.

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