Twitter posts better-than-expected ad revenue

While January and February were slow months for the company, growth via mobile app promotion (MAP) campaigns continues to progress.

Twitter: ad revenue was up 32% (Image: Shutterstock)
Twitter: ad revenue was up 32% (Image: Shutterstock)

Twitter recorded US$1.04bn in revenue in Q1, up 28% year-on-year (YOY) but down 20% from its high in Q4 last year. Of that figure, US$899m was derived from advertising revenue, up 32% from last year.

In terms of monetisable daily active usage (MDAU), Twitter’s key metric for the number of real users exposed to advertising per day, the total reached 199 million, up 20% year-on-year. Out of this number, 162 million were outside of the US.

“In Q1, we improved the viewer experience for ads across Twitter Amplify, and improved brand safety with the launch of conversation controls for advertisers,” Twitter CEO Jack Dorsey said during a call with analysts. “We also launched Curated Categories, a brand-safe way for advertisers to run pre-roll ads exclusively against premium video content.” Dorsey was reserved about sharing metrics around its recently launched audio product Twitter Spaces.

Twitter earnings snapshot:

  • Revenue: US$1.04 billion
  • Advertising revenue: US$899 million
  • Operating costs: US$984 million
  • Net income: US$52 million
  • Monthly daily active usage: 199 million

The platform said that it made “significant progress” on direct response advertising as it continues to display strong numbers via mobile app promotion (MAP) campaigns. In particular, MAP advertisers who spent money on betting, cryptocurrency and investing conversations on Twitter were said to have grown their spend by tenfold in Q1 relative to what was spent last year. For the year of 2020, the platform attributed 15% of its ad revenue to direct response advertising, a ratio that it looks to increase in the coming months.

Twitter’s ad growth percentage, however, was markedly lower than competitor Facebook’s whopping 46% increase YOY. During an earnings call, Twitter CFO Ned Segal said the start of this year has been unusual owing to the Capitol Hill riots and the aftermath of the US inauguration that pointed to a slowdown in brand activity. During this time of year, the platform also relies on large events such as the Grammys and Oscars, which this year were pushed back.

The tech giant is also investing heavily in talent with total costs and expenses growing 21% YOY. “As a result, we now expect headcount growth to more closely mirror expense growth in 2021,” the company said in a statement.

By closing time yesterday (April 29), Twitter’s shares were down 10.3%, which analysts say was due to a misguidance of investors. Despite healthy growth this quarter, the company said it now expected second-quarter revenue of US$980m to US$1.08bn, which is lower than analyst projections. On top of that, rivals Facebook, Alphabet and Snap continue to deliver above-and-beyond results.

This article was originally published on Campaign Asia

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