The 140 character social network released its Q4 2015 earnings. The blue bird is not doing well at all.
The growth story is the headline: for the first time in recent memory, a major publicly traded social network experienced negative monthly average user growth, quarter-over-quarter:
As shown above by the green bars, growth fell to -0.65%, or 2 million users. Twitter lost more users than it gained.
Mobile user growth tells the same story:
The ratio of mobile to all users remains 80%; mobile users declined by 1.6 million users quarter over quarter.
Should marketers and communicators who rely on Twitter be concerned? 2 million users is not a small number; it’s difficult to assess who those users were. 2 million spammy accounts vanishing wouldn’t be a loss to anyone, but 2 million of our core audiences would have dramatic impact.
The bright spot for investors is Twitter’s ad growth:
As with other social networks, retail and the holiday season always create a sharp lift in ad revenues in the fourth quarter; Twitter’s very strong ad revenue growth in the fourth quarter surpassed its previous resistance levels.
Twitter passed the all-important $2 revenue per user, shown by the blue line:
Average revenue per user is an important metric for effective apples-to-apples comparison to other social networks’ business models. Twitter’s business is as sound as others; if it can solve its audience growth problem, it will be on solid footing.
Looking Ahead: What It Means for Marketing and PR
Twitter’s marketing toolkit continues to grow; in the earnings report, CEO Jack Dorsey said Twitter not only launched more video ad units, but is experimenting with promoted Tweets inside Periscope video broadcasts. For any marketers seeking to leverage real-time video without real-time video capabilities of their own, these new ad options could be a great solution.
Dorsey also announced integration work continues on Twitter’s integration into the Double-click ad network, for increased access to advertisers.
Finally, Twitter is testing showing ads for logged-out users and a First View ad unit, which will show a video ad to users the first time they log onto Twitter each day.
For marketers and communicators, two important notes. First, make use of Twitter’s new ad options and test them out.
Second, keep a careful eye on your Twitter audience. Download your analytics, use tools like Watson Analytics to extract insights, and understand what your audience is doing. Use built-in analytics to monitor changes in your audience; if you see declines in key audience interests, prepare to change your Twitter strategy and reduce your investment in the platform:
Above, my Twitter analytics show a high concentration of people interested in marketing. If this number started to drop precipitously, I’d reconsider how much time I invested in Twitter.
The next year will be critical for Twitter; it’s make or break time. As an avid user of the platform, I hope the network makes it; as a marketer, I am prepared to market elsewhere if need be.
Christopher S. Penn
Vice President, Marketing Technology