Twitter blames revenue shortfall on ad sales - Mobile World Live

Twitter blames revenue shortfall on ad sales

27 APR 2016

Twitter’s revenue was up by 36 per cent in Q1 2016 to $595 million, the lowest percentage increase in its brief history, although it added 5 million new users since Q4 2015.

The social media company’s revenue was on the lower end of its forecast range ($595 million to $610 million) and down from $710 million in Q4 2015, with a Q1 net loss of $80 million, improved from $162 million a year ago.

The firm, which has yet to post a profit, blamed the poor performance on “slower than expected growth in brand advertising spend”.

Ad revenue contributes a majority of Twitter’s total revenue – $531 million in this quarter. Ad revenue actually increased by 37 per cent year-over-year but was down from $641 million in the previous quarter.

Ad revenue on mobile devices made up 88 per cent of this quarter’s total advertising revenue.

“Year-over-year revenue growth from large brand advertisers was softer than expected, although brand advertising remains our largest overall contributor to revenue,” the company explained.

“Revenue growth from SMB advertisers was once again the fastest, as we continue to focus on increasing the number of active advertisers we serve,” it said.

It added that it sees a “clear opportunity” to increase its share of brand budgets and has a “strong product roadmap to tap into incremental brand-oriented online video budgets.” It is planning to deliver additional features for advertisers later this year, including more detailed demographic targeting.

The increase in users is a positive because the previous quarter did not see any increase in numbers at all. Mobile users represented 83 per cent of the total figure.

The increase was only seen in users outside the US, domestically the figure was the same as a year ago (65 million).

“We saw a return to sequential growth in monthly active usage, driven by seasonality and marketing initiatives. We also saw deepening engagement (likes, replies and retweets) driven by a few important product launches, including the enhancements to the timeline and the Twitter-Periscope integration,” it said.

“We remain focused on disciplined execution to drive sustained audience growth over time,” it added.

It also said a top 2016 priority is to recruit “phenomenal talent”.

COO Adam Bain said in an earnings call that the firm wants to expand “the promoted video with Periscope option for marketers this quarter by bringing in the Android platform”, as so far it is only available for iOS.

The company reiterated the five priorities it laid out at the start of the year: refining its core service, live-streaming video, creators and influencers, safety and developers.

Twitter said it crossed a “huge developer milestone” in April, with over two billion devices using apps developed on its Fabric platform.


Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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