Twitter Earnings: What’s Driving Growth and What’s Next for Advertisers
April 30, 2014
Yesterday, Twitter released its 2014 Q1 earnings, shedding light on the company’s priorities in the past quarter, how these have affected growth, and how the company plans to continue this growth in Q2 and the year ahead. Building out its advertising platform is still a top focus for Twitter, therefore there were lots of nuggets packed in to the earnings report and investor call that are relevant to advertisers either currently using or evaluating using Twitter as a channel to reach their customers.
Here are the five things advertisers should take away from Twitter’s Q1 earnings call:
Twitter Users Are Even More Engaged on Mobile
What Twitter lacks in audience size, it makes up in engagement. Year over year, Twitter found that engagement is up 26% (favorites, retweets and replies) and that new users are proving to be just as engaged as existing users. Twitter attributes this boost to a more visually engaging, consumer-friendly site design, improved targeting, and the addition of more relevant content for users from brands and users alike. All this engagement should have advertisers thinking about ways to mimic the conversational, image-driven format that had caused this boost. Beyond taking advantage of Twitter’s new targeting tools as they roll out, look to engage users while in conversation about a topic close to your brand or events – an area where Twitter advertisers have found particular success.
Events Capture Consumer Attention & Ad Spend
Because users are actively engaged throughout the day and especially focused on current or trending events, Twitter describes itself as a “companion experience to what is happening in your world.” The most successful Twitter advertisers are playing into this concept and advertising in bursts around events. Big events like the Oscars and Olympics attract the most attention, but it’s the advertisers that are finding ways to advertise around both large events in addition to smaller, everyday events that are finding the most value in Twitter. For Q2, advertisers have a few big events to look forward to (World Cup, Cannes Film Festival, Mothers Day), but should also look for ways to keep their content relevant in the time between events by hooking on to smaller trends, like summer music festivals, or ongoing events, like sports games and tv shows.
Twitter’s TV Strategy is on the Right Track
Part of advertising around events is tying into their broadcast, which remains a top priority for Twitter as explained in their earnings call. Twitter dropped numerous data points showcasing the complementary relationship between Twitter and TV, noting that 92% of Twitter users have taken immediate action after seeing a tweet about a show and that using twitter while watching TV decreases the likelihood the person will change the channel. Twitter did not hint at any big changes coming on this front, but rather confirmed that this strategy is well founded and has resulted and will continue to result in positive outcomes for numerous advertisers.
New Features Will Drive 2014 Growth
Twitter continued to emphasize on the earnings call that growth in 2014 will result from the intersection of a combination of factors, rather than just one or two. The company made a handful of changes in Q1 to make the platform more attractive to both consumers and advertisers, and expressed confidence that these, in confluence with other new products recently or to be released in 2014 will drive this growth.
So what can advertisers expect when it comes to new products? Improved measurement capabilities and targeting, a wider variety of ad products, and more ways to reach more mobile audiences beyond Twitter should all be horizon as Twitter looks to improve the effectiveness and reach of its ad platform – especially when it comes to direct response. Two key products that should be on advertisers’ radars:
Mobile App Install Ads
Released just last week, Twitter’s mobile app install ad product enables consumers to install an app from an advertisement in one click. This ad format has proven incredibly successful on Facebook and will likely prove the same for Twitter. Mobile app developers can also look forward to a simpler means of measuring ROI as this product is designed to drive a specific action tied to an advertising objective. Twitter boasted that this product is already receiving great feedback thus far from companies including HotelTonight and Spotify.
Twitter’s mobile ad network will provide advertisers an opportunity to extend their reach beyond Twitter’s user base to an estimated 1 billion mobile app users. This solves for some of Twitter’s growth problems and provides advertisers a single point of contact to reach their various mobile audience via different apps. Twitter execs also mentioned that MoPub can be used to pull Twitter users back into the Twitter platform after they’ve left and gone in to another app, providing an ongoing opportunity to re-engage users.
Advertisers Still Have More to Learn About Twitter
When asked what will drive the most advertising growth moving forward, Twitter executives responded that it will be a combination of better targeting, improving content relevancy, and advertisers learning how to better use twitter. This shouldn’t be read as a put down that advertisers don’t know how to use Twitter, rather that Twitter, advertisers, third-party providers are all still working hard to determine the best strategies for delivering relevant content to their users and driving them to click or convert.
At Ampush, our top priority is ensuring that our team and our clients have all the information they need to achieve their marketing goals at scale, therefore, be on the lookout for more Twitter-focused tips, tricks, and deeper insight over the next few weeks and months as Twitter rolls out new features for advertisers. We’re also working with closely with Twitter to enhance both team’s offerings and vow to provide insights and data as soon as it becomes available to share.
Give us a shout here if you’re interested in learning more about advertising on Twitter and be sure to check the blog for timely insights, product news, and best practices.