Trump Media & Technology Group, the startup company that owns and operates the social media platform Truth Social, has not turned a profit since it was founded in February 2021. It remains hopeful. The company has expanded into news content production and video streaming services in recent years. However, while it is ambitious, the fact remains that its flagship product, Truth Social, has struggled to turn a profit due to its failure to attract high-quality advertisers in the competitive social media market and the greater digital platform markets.
The Key Challenges Truth Social Faces in Attracting Advertisers: Lessons in Positioning
The main business or revenue-generating model of popular social media platforms like Facebook and TikTok is digital advertisement. These platforms sell ad spots to advertisers. These ad spots are located in different sections and can display different types of digital ads. This is what Truth Social lacks. Note that it also uses the same ad revenue model but it lacks the prerequisites and other qualities and features required by most advertisers. Take note of the following:
1. Niche-Specific Platform with Limited Audience Reach
There are still a few digital advertisements on the Truth Social platform but are limited to niche products like the controversial drug ivermectin, conservative dating sites, and some branded merchandise. One of the key reasons it struggles to attract high-quality and high-paying advertisers is that it has a smaller user base compared to Facebook, Instagram, and TikTok.
It is also important to underscore the fact that Truth Social appeals to Americans with right-leaning political views or those who are staunch followers of Donald Trump. It is a niche platform that has been constrained by its political leaning. Moreover, unlike Facebook and TikTok, which have large user bases outside the United States, it has failed to attract users from other countries.
Advertisers prioritize platforms with large and diverse audiences to maximize reach and return on investment. Furthermore, in most cases, especially in the case of global brands, advertisers avoid politically charged environments to prevent brand risks or alienating customers with differing views. Truth Social essentially has a user base that is cost-inefficient for advertisers.
2. Transparency Concerns Due to Lack of Usage Metrics
There are also internal situations unique to Truth Social that prevent it from attracting high-quality advertisers. Trump Media has asserted that it does not use traditional metrics like the number of active users per month and user engagement levels based on comments or shares. These metrics are commonly tracked and published by platforms like Facebook and TikTok.
It is not clear why Truth Social refuses to use these metrics. However, based on its smaller user base, some have considered that using traditional metrics would paint an unimpressive picture and highlight its shortcomings. The platform is essentially avoiding unfavorable comparisons with more established social media platforms by snubbing these traditional metrics.
The lack of transparency discourages advertisers from purchasing ad spots and placing ads on the platform. Digital advertisement depends on different kinds of data. Specific data about the level of engagement and user base number are critical not only in measuring the performance and overall effectiveness of ad campaigns but also in adapting and optimizing existing ones.
3. Absence of Ad Targeting Tools and Content Moderation
Meta Platforms has been developing the ad targeting features of Facebook and Instagram. The same is true for other platforms like X or Twitter and TikTok. These social media platforms offer sophisticated tools that enable advertisers to effectively target their intended audience based on demographics, geographics, and even psychographics like behaviors and interests.
Truth Social lacks the aforesaid level of data-driven ad capabilities. This reduces its appeal to advertisers looking for precise audience targeting and other segmentation features. Adding to this is the fact that the platform has suffered from various technical and operational challenges like outages and bugs. The platform fundamentally feels outdated and less enticing.
Advertisers are also cautious about the platforms they choose to advertise on. Most of them want platforms with a clear content moderation practice and policy. Truth Social is more lenient when it comes to content. It does not prohibit controversial, misleading, or potentially dangerous content in most cases. This loose moderation policy has made brands hesitant to advertise.