The results from Twitter’s Q4 earnings report are mixed. Despite what many would’ve expected to be a huge final quarter as a result of the election, Twitter’s growth in monthly active users was modest, its Q4 revenue failed to meet expectations, and it continues to struggle with monetizing a platform that’s an indispensable piece of the influence and engagement puzzle in today’s social media landscape.
Still, it wasn’t all doom and gloom. Growth in daily active users signal a more engaged user base, and significant gains in certain segments of ad engagement suggest that Twitter may be able to turn around its monetization problem, provided it figures out how to capitalize on its massive influence.
Here are the ten biggest takeaways from Twitter’s Q4 earnings report:
In its fourth quarter, Twitter saw growth in monthly active users that constitute a 4% gain year-over year. Some gains are better than no gains, but those numbers aren’t great. Not in the context of expectations Twitter. But that’s nothing new. Historically, Twitter’s struggled to meet growth expectations. It’s always been a platform with impressive reach and influence, but whether by virtue of an ecosystem that can be unwelcome to newcomers or by a kind of near-saturation in its current key demographics, Twitter’s never seen growth numbers like Facebook.
For context, during the same period, Facebook grew by 72 million monthly active users.
It sounds like a lot, but that number has Twitter shares taking a hit. $717 million is up just one percent over last quarter and falls short of Wall Street’s revenue estimates. Like user growth, revenue and monetization have been tough categories for Twitter. Influence and engagement don’t translate to massive revenue gains, and naturally, that tends to be something of a problem for investors.
Though Twitter’s monthly active users saw underwhelming gains, daily active users (DAUs) are up 11% on the platform year-over-year. And that’s the number Twitter wants you to focus on, because it speaks to increased engagement among the platforms existing users. In recent months, Twitter’s become a hotbed of activity for political news and opinions (which, to be fair, could be said of every social media platform), and that may have had something to do with the DAU boost. Whether or not that growth is sustainable remains to be seen.
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In total, Twitter reported $2.5 billion of total revenue for 2016. All told, that’s an increase of 14% year-over-year. Again, it sounds like a lot, but it’s not making investors jump for joy. For context, Facebook reported $8.8 billion of revenue for Q4 alone. It’s tough to keep up with numbers like that.
In better news for Twitter, looks good. Twitter’s partnered with organizations like the NFL, MLB, NHL, and NBA to stream live content. Those 600 hours drew a total of 31 million unique viewers to over 400 events, 52% of which were sports, 38% news/politics, and 10% entertainment.
Twitter’s livestreaming was huge for events, and several of the biggest events were related to Election 2016. Livestreaming on Twitter drew 4.2 million viewers for the final debate, 7.5 million viewers on election night, and 8.6 million viewers on Inauguration Day. That number pales in comparison to CNN livestream numbers, which came in at 16.9 million.
Livestreaming didn’t stop with events and content partners, though. During Q4, Twitter saw 6.6 million hours of livestreamed video through Periscope. That’s the equivalent of 275,000 days (753.4 years), or enough time to listen to “Video Killed The Radio Star” over 93 million times.
Twitter began running ads on live videos and they were met with pretty stellar results. Boasting 95% completion rates, live video ads are attractive to advertisers. But it’s important to note that completion rate metrics might not tell the whole story of ad success. Some of these ads may not be optional, meaning that users have to watch the ad to get to the content. That metric also doesn’t account for blocked ads.
Live video ads weren’t the only advertising effort that encountered success. Twitter saw ad engagement increase by 151% YoY. Twitter attributes this to the growth to higher clickthrough rates (CTR) and a move toward video ad impressions. In addition, the average cost per engagement decreased by 60%.
One of the consistent through lines in social media and marketing news is mobile. It’s big and it’s only getting bigger, becoming a larger and larger piece of the content pie. Overall, ad revenue was down, but the fact that the vast majority of ad revenue is coming from mobile ads is significant and speaks not only to the importance of mobile advertising, but fact that Twitter’s mobile presence is staggering.
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