SAN FRANCISCO — As a company, Twitter is an adolescent — gangly, starry-eyed, growing like a weed and unpredictable.
No wonder advertisers and investors are having trouble figuring it out.
The social networking company shocked Wall Street on Tuesday by reporting slower-than-expected growth in advertising sales, which account for nearly all of its revenue. Shares of Twitter, which fell 18 percent on Tuesday after the first-quarter results were disclosed, dropped an additional 9 percent on Wednesday.
Although revenue rose a brisk 74 percent in the quarter compared with the same quarter a year ago, it was less growth than in Twitter’s five previous quarters and well below the high bar that the company had set.
Twitter attributed the disappointment to advertisers’ reluctance to spend heavily on ads that prompt the viewer to take an action, like download a smartphone app or apply for a credit card. This type of ad, known as direct response, is a newer area for Twitter, which originally focused on general brand image ads.
Marketers say they are indeed more cautious about Twitter’s direct-response ads because the microblogging service has not yet shown that it can target or track those ads with the level of precision that advertisers want. Compared with mature rivals like Google and Facebook, Twitter doesn’t know as much about its users, and it is more difficult to measure results.
Facebook has so much data on its users, “you could actually target a premium credit card to a businessman you know is traveling all the time,” said Bryan Wiener, chairman of 360i, a digital marketing agency that works with brands like Capital One, NBCUniversal, Spotify, Oreo and Oscar Mayer.
“That’s the kind of information that’s missing from Twitter,” he said. “There’s not this rich history of your holistic life.” As a result, he said, many brands are unwilling to commit big money to Twitter ad campaigns.
Richard Alfonsi, Twitter’s vice president for global online sales, defended the company’s targeting and said that plenty of advertisers understood the company’s value to them. He cited as examples King, which makes mobile games like Candy Crush Saga, and the Lyft ride-hailing service.
“We have a long list of advertisers who are having success,” he said. Still, he acknowledged that Twitter needed to do more to prove to advertisers that it delivered results. A new partnership with Google’s DoubleClick platform, which many brands and agencies use to buy and measure an ad’s effectiveness across platforms, will probably help with that when it is introduced in the next few months.
Even if they have doubts, advertisers are intrigued by Twitter’s position as the world’s agora. Many consider it the most important hub for live conversation, especially around major events, and they want to be part of it.
Macy’s, the department store chain, is increasing its investment in Twitter ads more than in other social platforms because of that real-time appeal.
During the N.C.A.A. college basketball tournament, for example, Macy’s ran a campaign using a direct-response polling product from Twitter that asked fans which team they wanted to win. The act of voting created another tweet that the fan could send out to tell other Twitter users how they voted.
Travis Freeman, head of social at the Dentsu Aegis Network, the advertising agency that handled the campaign, said the goal was to make Macy’s part of a relevant conversation, not necessarily to drive sales.
He said the campaign was effective, although he declined to disclose details. “It took relevant content with relevant timing with relevant conversation and tied it all together to ask people to do something that they were really interested in,” he said.
Mr. Freeman said that, in general, Twitter is best for building brand awareness and recall. Its weakness is the ability to measure direct-response effectiveness.
“A lot of times, brands don’t really know what to do with it,” he said. “And that was Twitter’s fault because I don’t think they had a very clear direction.”
Ivan Pollard, a top marketing executive at Coca-Cola North America, said that Coke had successfully used Twitter for large-scale ad campaigns, like #shareacoke, and was devoting more money to the platform.
“They’re very good at understanding an advertiser’s needs and very willing to work with advertisers to achieve their ambition,” he said. But he also noted that Coke experimented with every new platform because that was where its customers were.
Brian Wieser, an analyst with Pivotal Research, said the stock market’s negative reaction to Twitter’s stumbles was really a matter of unrealistic expectations for the still-young company.
“It’s hard to grow that fast that consistently,” he said.
Mr. Wiener, the 360i chairman, said that Twitter’s growing pains were not unusual for newer ad platforms. “Eighteen months ago, we might have been having a similar conversation about Facebook,” he said. “That’s the awkward teenage phase that Twitter is in now.”
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