State of Social 1Q15: Twitter Opens Up The Ad Spigot

The 140 character social network released its Q1 2015 earnings. Let’s take a look at where the bird has landed.

Growth

Twitter grew quarter over quarter by approximately 5% to 308 million monthly active users. The network’s rate of growth has picked up after a bad Q4 from a membership perspective:

Worth noting is that they seem to have saturated their mobile audience growth; the percentage of mobile users to total users has held steady near 80% for three quarters in a row:

Ad Revenue

Here’s the big news and the reason Twitter’s stock took a beating on the after-hours market:

The first quarter for all social networks is always a tough one compared to the way B2C advertisers spend like drunken sailors in Q4. Yet over the years, Twitter has never experienced negative ad revenue growth in any quarter. Q1 has usually been soft, but never a loss.

Compared to a year ago, they’re still showing overall growth, but investors took note of the quarter-over-quarter loss with alarm:

Forward Looking

Twitter’s recent moves to remove data partnerships in favor of building out its own data practice, as an additional revenue source. Expect to see more of this, as data licensing and ad revenue are their only two income streams.

Two announcements Twitter made at earnings will dramatically impact marketers. First, the purchase of TellApart means Twitter is bolstering its own advertising technology with predictive ad analytics. This will continue to improve Twitter’s ad offering, which is of benefit to marketers and communicators.

The second announcement was even more impactful:

Twitter also announced a partnership with Google’s DoubleClick platform to improve advertising performance measurement and attribution for Twitter direct response marketers. As part of the partnership, Twitter will also make its inventory available through the DoubleClick Bid Manager, making it easier for clients who prefer to centralize their campaigns on Twitter. 

This is a huge deal for marketers who use Google’s Demand Side Platform, DoubleClick Digital Marketing, including AdWords users. Your Display ads may soon be appearing on Twitter, allowing you multiple ways to manage ad inventory to the network. Imagine the power of using AdWords’ remarketing capabilities (including the integration with Google Analytics’ Big Data Remarketing) with Twitter’s inventory, above and beyond Twitter’s existing ad systems.

Overall, while investors may have been spooked by Twitter’s performance, marketers should still include it in social media marketing plans. 308 million users and enhanced advertising options continue to make Twitter an essential part of a paid social media strategy.

Christopher S. Penn
Vice President, Marketing Technology

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