Twitter steadily grows its audience as it shifts content strategy
Over the past year, Twitter has been diversifying its revenue streams in recognition of the changing economics of creating content. Its latest results, published today, demonstrate the benefits of that diversification.
Twitter's latest results demonstrate its changing focus is bearing fruit
Ned Segal, Twitter’s chief finance officer described it as a ”solid” fourth quarter, reporting $5bn in annual revenue, up 37% for the year. ”There are no changes to our goals of 315 million average daily active users (mDAUs) in Q4 2023 and $7.5bn or more revenue in 2023. Our increased focus on performance ads and the SMB opportunity after the sale of MoPub positions us even better for 2022 and beyond.”
Average monetizable DAU (mDAU) reached 217M, up 13% y/y, driven by product improvements, as well as global conversation around current events. $TWTR pic.twitter.com/O77d6ZgOWj
— Twitter Investor Relations (@TwitterIR) February 10, 2022
However, the company posted lower-than-expected profit as expenses climbed. The net loss for the full year amounted to $221m, which the company ascribes to higher than average costs and the lingering impacts of Covid upon spending. Despite that, ad sales rose 22% overall in the fourth quarter.
Total ad engagements decreased 12% YOY but with cost per engagement (CPE) increasing 39%.
Twitter also performed an internal audit of its users and determined that around 5% of its mDAUs were “false or spam accounts” during the fourth quarter, meaning that the vast majority of its users are valid and addressable by advertisers on the platform.
Parag Agrawal, Twitter’s CEO, said: ”Our strong 2021 performance positions us to improve execution and deliver on our 2023 goals. We are more focused and better organized to deliver improved personalization and selection for our audience, partners, and advertisers.”
Meta’s recently announced results were negatively impacted to the tune of around $10bn over the course of 2022 by iOS changes implemented by Apple. Twitter, by contrast, has seemingly managed to avoid the worst of that impact, with Apple’s privacy changes having a limited impact on the platform’s relationship with users.
Overall the results were largely in line with analysts’ expectations.
Twitter transition
It has also announced a number of new video partnerships, as its status as the most immediately reactive and zeitgeist-based platform makes the ‘live’ element central to its appeal.
Aaron Goldman, chief marketing officer at Mediaocean, says: “As Twitter likes to proclaim, the platform is what’s happening in the world and what’s happening in the world is on the platform. This makes Twitter an indispensable place for brands to engage consumers. Twitter is also at the nexus of multi-screen interaction as the companion app to live sports and scripted programming alike.
“Video, in particular, has grown tremendously on Twitter and makes the platform a compelling part of converged TV strategies. We see this coming into play especially with events like the Super Bowl and Olympics. For brands to take full advantage of Twitter’s ad opportunities, tools for dynamic creative and automated personalization are critical to reach the proverbial holy grail of right people, right place, right time, right message.”
Twitter is in the middle of a reinvention process, one that marries longer-form content with the newsletter format that has driven several successful subscription strategies at other publishers.
In January 2021 it announced it had acquired the newsletter company Revue, noting that Twitter was a disproportionately big driver of newsletter subscriptions. Consequently it has many more ad formats and content opportunities as the integration continues to bed in.