Twitter's Q2 ad revenue drops 8% as US users fly away
- Twitter detailed its second quarter results this morning, including that ad revenue dropped 8% from a year ago for a total of $489 million, according to a Forbes report. While revenue from data licensing and other areas grew 26%, overall revenue decreased 4.7% for a total of $573.9 million.
- While revenues were better than expected, decelerating usage growth caused shares to drop in early trading. Twitter reported Q2's daily active usage was up 12% from the year-ago quarter. However, the growth rate slipped from 14% in the previous quarter. Additionally, average monthly active users in the U.S. decreased to 68 million in Q2 from 70 million in the previous quarter, per Reuters. The overall average monthly active user number was flat at 328 million.
- Twitter's quarterly net loss is growing, coming in at $116 million for the quarter compared with $107 net loss in the same quarter a year ago, according to a company press release.
Twitter tried to paint a picture of progress in a press release about the results, insisting that recent product improvements will drive greater use. Twitter is still a high-profile player thanks to its popularity with President Trump and a number of celebrities. However, competing for advertising dollars with Google and Facebook is only going to get tougher for Twitter if average consumers aren't engaged.
On the ad side, COO Anthony Noto said in the statement that video remains the platform's largest and fastest growing ad format, which isn't surprising given that video is accelerating across the digital marketing industry. Twitter faces stiff competition in video and whether or not the company's efforts to enhance the strategy, like the live premium video content debuted at Twitter's Digital Content NewFronts, will attract more advertising dollars when usage growth is decelerating remains unclear.
Twitter's main competitors for ad dollars are Facebook, which will reportedly launch a premium video offering next month, and YouTube, whose skinny bundle is now available in a handful of cities. This week, Google said its advertising revenue increased to $22.7 billion in the second quarter, in part because of strength in ad sales for YouTube.
Twitter's efforts to improve the user experience include cracking down on abusive accounts with a 10x increase in actions against trolls.
While slowing usage growth suggests Twitter's influence may be waning, the platform is still an important avenue for real-time conversations about what's happening in the world, as evidenced by how the film "Wonder Woman," a box-office success, also became the most tweeted-about movie of 2017 soon after its release with 2.19 million posts.