Threads, a new social media platform introduced by Meta Platforms as a challenge to Twitter, is being perceived by certain advertisers as less controversial and more predictable than Elon Musk's platform, Reuters reported.
Industry analysts suggest that Threads has the potential to attract marketing budgets away from other platforms in the long run.
Having launched on July 5, Threads has achieved a significant milestone by rapidly amassing 100 million users, making it the fastest-growing social media platform and the first genuine contender to Twitter's dominance in microblogging.
In response, on Sunday, Elon Musk announced Twitter's plans for a rebranding and a logo change, possibly to an X symbol.
While Threads garnered considerable attention during its highly publicized launch, research firm Sensor Tower observed a decline in downloads and user engagement in the subsequent week.
Currently, the platform is not open to advertising.
Despite this initial slowdown, analysts remain optimistic about Threads' advertising potential, under the condition that it can retain its user base.
They have projected ambitious targets for ad spending, with Bernstein suggesting that if the app manages to retain users, it could generate an annual ad revenue of $5 billion, equivalent to Twitter's earnings in 2021, as mentioned in their note on July 18.
"The unprecedented adoption of ... Threads now also offers Meta some material greenshoots to get excited about," they said, while cautioning that it was still early days and other upstarts like Clubhouse had fizzled out.
Morningstar analysts said on July 11 that Threads could add between $2 billion and $3 billion to Meta's revenue every year between 2024 and 2027. Evercore ISI analysts estimated on July 9 that Threads could generate $8 billion in annual revenue by 2025, a small portion of the $156 billion revenue analysts expect for Meta that year, according to Refinitiv.
In the hope that Threads will flourish - thanks to Meta's deep pockets and experience with successfully running Instagram and Facebook - and the expectation it will introduce advertising eventually, some brands may already be considering how much money to set aside for future marketing campaigns on the app, analysts and ad industry executives said.
Taylor Michelle Gerard, a senior executive at content marketing firm Blue Hour Studios, said some of her clients are considering adding a Threads post along with TikTok or Instagram posts as part of sponsored deals with influencers.
"It's a nice way to work Threads into an existing campaign," she said.
Once Threads ads are available, brands will move their ad spending over from Twitter "without question," said Matt Yanofsky, co-founder of Moment Lab, a brand marketing and advertising agency.
He said some of his clients, who he did not name, are already examining whether to add a budget for Threads ads later this year.
Meta did not comment for this article.