State of Social 2Q14: Twitter Flies Higher

Twitter released its second quarter 2014 results recently, and it looks as though Twitter has found the wind beneath its wings.

SHIFT State of Social

Note that in the graph above, we’ve superimposed a 4-period moving average, meaning the moving average across four quarters, or the year. Twitter is consistently and strongly beating its 4-period moving average, and that’s a good thing for the growth of its membership. Let’s see how fast it’s growing:

SHIFT State of Social

Twitter has managed to sustain its growth rate of around 6-7% quarter over quarter excepting 4Q13, which works out to an annual growth rate of about 16.81% (CAGR). That’s a healthy growth rate and they’ve managed to sustain it for some time. But does user growth translate into revenue, or is Twitter going to need to start squeezing advertisers harder for funds the way Facebook has?

SHIFT State of Social

Indeed, Twitter has found revenue aplenty – in the last four quarters, Twitter has achieved an 81% annual growth rate in revenue, far outpacing its users. This revenue is driven by the success of their TV advertising integrations, multiple cards for advertisers, and mobile app cards especially, cited by CEO Dick Costolo in their earnings call. Let’s look at the growth rates by quarter:

SHIFT State of Social

Twitter’s ad revenue is up 23% in the second quarter vs. 21% in the same quarter of the previous year; each quarter of 2014 has been better than the same quarter in 2013, meaning that Twitter is deriving real value from its advertisers at a faster pace than it’s acquiring users. That’s a healthy place to be for the long-term health of the business. We see this in revenue per user:

SHIFT State of Social

After a brief, minor stumble in the first quarter, Twitter has grown its revenue per user again, crossing the $1 per user benchmark.

All of the financial and growth data suggests that Twitter is on solid footing – and they’ve achieved it without throttling what users see, unlike Facebook’s News Feed algorithm.

What does all of this mean for marketing and communications professionals?

Twitter’s growth and sustainability has been coming from more options being offered to marketers, advertisers, and communicators. Marketers have enjoyed a few types of Twitter Cards in the past to highlight their offerings and now have a choice of 9 different ways to highlight content with organic and paid promotion, including Summary, Products, Photos, Featured Summary Images, Media Players, Apps, Galleries, Websites, and Lead Generation cards. These cards are effective and can be used for unpaid organic promotion as well as paid promotion. If you’re not using Twitter Cards already, you may be missing out on opportunities to highlight your content more richly.

Twitter’s acquisitions of Gnip, TapCommerce, and SnappyTV also hint at their future plans for additional forms of advertising. TapCommerce provides more retargeting and eCommerce features, especially for mobile eCommerce, while SnappyTV plays to their existing TwitterTV capabilities. Of note in their design and UX hiring openings, they’ve started recruiting for market research and user research. These new career openings may be complementary to the Gnip acquisition, suggesting that they may either be seeking to monetize the data they’re collecting more effectively, or they intend to pair qualitative research with their data collection. Either way, marketers, advertisers, and communicators should be paying close attention to their Twitter Analytics portal to look for new features as they roll out.

Finally, Twitter’s recent rollout of Website and Mobile App Conversion Tags means that marketers, advertisers, and communicators have the ability to do effective retargeting of their digital properties. Be sure you’ve got these tags enabled sooner rather than later so that you can take advantage of current and new paid media options to reinforce your earned and owned media efforts!

Christopher S. Penn
Vice President, Marketing Technology

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Posted on July 30, 2014 in Advertising, Marketing, 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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