Twitter’s mobile push resonates, driving revenue and stock value
By Chantal Tode
July 30, 2014
World Cup broke Twitter record
Twitter’s moves to enhance its mobile advertising offerings are resonating with brands such as Budweiser and Coca-Cola, helping to drive a 124 percent increase in revenues during the second quarter.
Continuing the push into better ad experiences, Twitter announced yesterday during a conference call with analysts to discuss is second quarter results that it will launch its new promoted video offering in beta in August. The strong results and the market’s response – with Twitter’s share value jumping during after hours trading yesterday - suggest that Twitter has begun to answer some of the questions investors and brands have had about its potential.
“Ad revenue reached $277 million dollars, up 129 percent from last year,” said Mike Gupta, Twitter’s former chief financial officer and recently appointed senior vice president of strategic investments, during the conference call.
“This is the highest rate of year-over-year growth that we have seen in advertising revenue in the last six quarters,” he said. The strength in our advertising business is broad based across all channels and geographies, with particular strength in international markets due to strong advertiser demand around the World Cup.
“Our promoted products continue to deliver high levels of engagement and marketers are increasing budget and spending in response to the ROI that they are seeing on our platform.”
Cost per ad increases
The promoted video offering will provides a way for content producers and brands to easily upload, share and measure the distribution and effectiveness of their video content on Twitter.
Mr. Gupta also reported that the cost per ad engagement increased 18 percent, Twitter’s first increase in reported CP. The increase was due in part to strong advertiser demand around the World Cup and a shift in the mix of ads toward high-performing and higher-cost ad units.
During the second quarter, Twitter’s advertising revenue totaled $277 million, up 129 percent.
Mobile represented 81 percent of total advertising revenue.
Overall, Twitter’s revenue grew 124 percent during second quarter for a total of $312 million.
One of Twitter’s challenges is that its user base is still relatively small, but it added new users during the second quarter, helping to address these concerns.
During the second quarter of 2014, the average number of monthly active users on Twitter totaled 271 million, up 24 percent.
Mobile monthly active users reached 211 million, up 29 percent and representing 78 percent of total monthly active users.
The company also reported a net loss of $145 million for the second quarter compared to net loss of $42 million in the same period last year.
Twitter continues to build out its mobile offerings, helping it to bring onboard big brands who want to leverage its ability to reach consumers in real-time.
Yesterday, Coca-Cola announced a new Tweet-a-Coke program enabling consumers send a soft drink to their friends for $5 via a tweet that can be used at Regal Cinemas locations.
In June, Budweiser leveraged a new Twitter voting mechanism as part of its 2014 FIFA World Cup Brazil promotion, enabling fans to view side-by-side player photos before casting their vote for each game’s top athlete (see story).
Twitter built a number of new product experiences around the World Cup, helping to make the final game the most tweeted live event.
In the spring, Amazon launched #AmazonCart, which turns any link in a tweet into a shopping cart that hooks up with an Amazon account (see story).
App install ads
Twitter is also going after the app install ad market, which originated on Facebook and grown into a significant business for the latter.
While Twitter’s reach is smaller than Facebook’s, its own recent launch of app install ads has potential, particularly with lifestyle apps, because of how marketers can target users based on interest, keywords and followers on Twitter (see story).
Twitter also recently acquired mobile advertising startup TapCommerce, which enables marketers to retarget ads based on previous user behavior, a strategy that is quickly growing on mobile.
“Twitter purchased TapCommerce to expand upon their mobile monetization as they look to focus more efforts on the mobile growth, which has been a major driver of success for Facebook,” said Ken Wisnefski, founder and CEO of WebiMax.
“They also purchased mobile processor CardSpring with the hope of utilizing a mobile e-commerce scenario, again following in the footsteps of Facebook’s new initiatives,” he said.
“Twitter seems to be focused on growing its viability in the market as a meaningful destination for marketers and truthfully, a meaningful destination for users to engage more actively.”
Chantal Tode is senior editor on Mobile Marketer, New York
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