Twitter's ad revenue shrinks in bleak Q4
- Twitter released its fourth quarter earnings Thursday morning. The company reported quarterly revenue growth of 1% year-over-year to $717 million, and its ad revenue declined year-over-year to $638 million. Twitter-owned-and-operated advertising revenue stood at $553 million, down 1% year-over-year.
- Twitter emphasized strong audience engagement in the report, but monthly active users only grew by two million from Q3, reaching 319 MAUs total.
- Twitter has recently enacted myriad belt-tightening efforts in an attempt to ensure profitability: The company laid off 9% of its staff following Q3 earnings, shuttered its video-looping app Vine and sold off a variety of tech properties to Google, including the Fabric mobile app developer platform. Despite the scale and variety of these belt-tightening efforts, the impact has been limited.
While Twitter’s growth has seemed particularly slow over the past fiscal year, an actual decline in ad revenue underscores a more desperate state for the social media company than some might have predicted. Neither holiday marketing pushes nor the constant activity of major societal figures such as President Donald Trump on the platform appears to have provided a much-needed boost in Q4.
Twitter also has recently hedged its bets on live video offerings, brokering deals with a variety of media organizations including the NFL, and integrating Periscope streaming for users. Though these partnerships remain strong and may attract more ad dollars in 2017, the micro-blogging site’s actual user growth appears relatively stagnant, which might be a turnoff for brands.
Research from RBC capital markets from last year found 30% of surveyed marketers don't put any ad budget into Twitter at all. Despite Twitter's concentrated push into live video, many brands still find the platform most valuable as a customer service and experience tool, which doesn't necessarily net Twitter a ton of revenue.
This week's Super Bowl showed that Twitter still has an important role to play in live events, with more than 27.6 million tweets using the #SB51 hashtag sent during the broadcast and a number of big brands like Pepsi and Budweiser active on the platform promoting their TV campaigns.
Any attention paid to Twitter might continue to dim as key competitor Snap Inc., the parent company of Snapchat, forges ahead with plans for an initial public offering of stock expected for March.
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