Meta Threads
Threads is expected to have a major impact on online advertising in the future. Pexels

It looks like Meta's newly launched social media platform Threads could give Elon Musk's Twitter a run for its money. Advertisers are restlessly looking for a new social platform to reach their consumers while Twitter continues to struggle.

Understandably, a considerable number of advertisers believe Threads is less contentious and more predictable compared to Twitter. So, it isn't surprising that some analysts claim Threads could eventually lure advertisers away from Twitter.

To those unaware, Meta's "Twitter killer" took the internet by storm when it went official on July 5. Notably, it already has more than 100 million sign-ups. According to a CNBC report, Threads' skyrocketing popularity has caught the attention of some companies, Industry experts, and marketing agencies.

So, it is safe to say that Threads is the first serious threat to Twitter, which recently underwent a radical overhaul with Musk replacing the bird logo with X. Following its hyped debut, however, Threads saw a decline in downloads and engagement, managing director of research firm Sensor Tower Anthony Bartolacci told CNBC.

Threads is still in its early stages

It is also worth noting that Threads is currently not open to ads. Still, analysts hint at lofty ad spending targets, provided the platform retains its users. A report by Reuters suggests Threads could earn a whopping $5 billion (about £388,878,000,000) in annual ad revenue if users stay on.

Analysts at Bernstein point out that this is the same amount Twitter earned back in 2021. "The unprecedented adoption of Threads now also offers Meta some material greenshoots to get excited about," the analysts said.

However, the analysts suggest it is still early days, further pointing out that other upstarts like Clubhouse have failed. Earlier this month, Morningstar analysts predicted that Threads could add between $2 billion (about £1,250,000,000) and $3 billion (about £1,875,000,000) to Meta's revenue annually between 2024 and 2027.

According to a Bloomberg report, Evercore ISI analysts believe Threads has the potential to generate $8 billion (about £53,000,000,000) annually by 2025. Also, analysts and ad industry executives suggest some brands may already be considering how much money they need to set aside for future marketing campaigns on Threads.

However, Meta is still mum on its plan to introduce advertising on the newly launched platform. Nevertheless, considering that the American tech company has been successfully running Instagram and Facebook, we might see advertising on Threads in the near future.

Blue Hour Studios' Taylor Michelle Gerard said her clients are prepping to add a Threads post along with Instagram and TikTok posts in collaboration with influencers. "It's a nice way to work Threads into an existing campaign," she said.

Co-founder of Moment Lab Matt Yanofsky also claims brands will shift their ad spending to Threads over from Twitter as soon as Threads ads are available. According to Yanofsky, some of his clients are already considering whether to add a budget for Threads ads later this year.

Can Threads beat Twitter?

In the wake of abrupt changes in Twitter policies, a lot of advertisers have moved away from Twitter, according to vice president of ad agency R/GA, Andrew La Fond. Twitter, on the other hand, insists it does not promote content that's likely to violate its policies.

The social media giant says 99.99 per cent of views and tweet impressions are of "healthy" content. Nevertheless, Twitter acknowledged falling ad sales. Last week, Musk noted that ad sales dropped 50 per cent, but he did not mention the exact time frame.

Moreover, Twitter is sparing no effort to compete with Threads. In line with this, the microblogging website emailed a major ad-buying firm about the incentives it was offering to advertisers. The email, which was viewed by Reuters, also reminded the firm that they had spent less on Twitter ads this year.

Still, Threads has a long way to go before it could dethrone Twitter as the world's most popular social media platform. Twitter's last public disclosure shows the company had about 240 million monetisable daily active users as of July 2022.