Twitter's ad outlook improves
- Cleveland Research said advertisers gave their "best relative feedback" in more than two years, and that advertisers are encouraged by user growth on the micro-blogging application, changes in ad delivery and progress in live content, CNBC reported.
- The news sent Twitter shares up 5% on Wednesday. Twitter's shares are down nearly 30% from a 52-week high in October, but Wednesday's move sent its share price above both its 50-day and 200-day averages. Cleveland's analysis now predicts a 15% annual decline in ad sales this year, before growing 12% in 2018.
- The research report estimated advertising spending on Twitter to change little or decline in the near future due to poor results from prior campaigns and better returns from Facebook, Instagram and Google for the advertisers.
Twitter has struggled to prove that it's model can generate revenue growth, but the Cleveland Research report is the latest sign a series of moves to transform itself into a friendlier platform for advertisers and content creators could be starting to work. During the first quarter of 2017, Twitter added 9 million monthly users, its biggest jump in two years. However, ad revenue was down 11% during the same period.
Last week, the company rolled out a series of design changes to its most important features while making its iOS version more like the one for Android. The Twitter redesign came a day after the company updated its Direct Messages to make them more useful to marketers that want to use the platform for customer service and engagement. By providing greater flexibility for chatbots, companies can put as many as three clickable buttons in messages to interact more meaningfully with users.
This week, Twitter enacted new opt-out privacy policies that allow the platform to share more personal information about its audience with advertisers. While Twitter will continue to withhold the names, email addresses and phone numbers of its users from third parties, it will track the locations, website visits and other smartphone apps of account holders who don't change their privacy settings and opt out, in order for Twitter to glean more valuable insights on its users.
With each passing week, Twitter is finding ways to be more user-friendly for its customers and advertisers, such as its move to opening links in Apple's Safari browser instead of Twitter's in-app web viewer, which makes it easier for users to view content on websites without having to sign in again, as with subscription sites like The New York Times. Cleveland's report noted that the positive developments from Wednesday may take until later this year or next year to unfold suggesting that transforming Twitter’s platform and revenue growth will likely take time.