State of Social Q4 2016: Twitter Sees Negative Revenue Growth

State of Social Twitter

Twitter, the social network which still comprises the backbone of most social media metrics, made it through another year. While speculation was rampant about its purchase, it ended the year still an independent entity. Let’s see how it fared.

Audience Growth

Twitter’s audience growth continued to decline, slipping below 1% quarter over quarter:

Mobile growth remained at 83% of its user base accessing the service via mobile device:

We see in both growth charts that Twitter remains essentially static. It’s not a growing, healthy platform, especially when we look back to Facebook and its near 4% growth in a saturated marketplace.

What of their ad effectiveness?

Ad Revenue

Twitter’s fourth quarter revenue jumped 17% quarter over quarter:

While that number is good, it’s part of an alarming trend. Examine the previous fourth quarters of years past. Fourth quarter is when every advertising network should knock it out of the park. 2016 should have been a banner year for everyone, with a robust retail season, healthy economy, and an election cycle in which billions of dollars were thrown around.

What we see above, for the first time in the data, is negative year-over-year growth in ad revenue.

What contributed to these dismal ad revenue results? Twitter cited the following in their earnings letter:

Revenue growth will continue to lag audience growth in 2017 and could now be further impacted by escalating competition for digital ad spending and the re-evaluation of our revenue product feature portfolio, which could result in the de-emphasis of certain product features.

Average revenue per user once again topped $2 per user, but all indicators suggest it will not stay there:

Looking Ahead: What It Means for Marketing and PR

Our guidance remains largely unchanged for Twitter. We recommend it as a platform for B2B and B2C brands when it makes sense, such as around major cultural events and in specific communities of interest. We would strongly advise against going all-in on Twitter or diverting significant resources from other social networks to it, unless your analytics suggest that it is still a growth opportunity for your business.

We do recommend starting a synchronization program, a program to convert followers from Twitter to your other social networks. Encourage your followers to follow you on other networks, sign up for your email newsletter, and visit your owned media properties. In the event that 2017 is a worse year for Twitter and the network experiences continued significant declines, you will need to ensure that base of followers is accessible in other locations.

Christopher S. Penn
Vice President, Marketing Technology

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Posted on February 9, 2017 in Analytics, Marketing, Metrics, Social Media, Twitter

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About the Author

Christopher S. Penn is an authority on digital marketing and marketing technology. A recognized thought leader, author, and speaker, he has shaped three key fields in the marketing industry: Google Analytics adoption, data-driven marketing and PR, and email marketing. Known for his high-octane, here’s how to get it done approach, his expertise benefits companies such as Citrix Systems, McDonald’s, GoDaddy, McKesson, and many others. His latest work, Leading Innovation, teaches organizations how to implement and scale innovative practices to direct change. Christopher is a highly-sought keynote speaker thanks to his energetic, informative talks. In 2015, he delivered insightful, innovative talks on all aspects of marketing and analytics at over 30 events to critical acclaim. He is a founding member of IBM’s Watson Analytics Predictioneers, co-founder of the groundbreaking PodCamp Conference, and co-host of the Marketing Over Coffee marketing podcast. Christopher is a Google Analytics Certified Professional and a Google AdWords Certified Professional. He is the author of over two dozen marketing books including bestsellers such as Marketing White Belt: Basics for the Digital Marketer, Marketing Red Belt: Connecting With Your Creative Mind, and Marketing Blue Belt: From Data Zero to Marketing Hero.
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