The beleaguered 140 character social network released its Q3 2016 earnings. How did everyone’s favorite microblogging social network fare? After all, it was a rough quarter for Twitter, putting itself up for bid and gathering no takers.
Let’s check the numbers.
Twitter’s audience growth remains anemic, adding 4 million new users and essentially holding still at 1% quarter over quarter growth:
Mobile growth returned to 83% of its user base accessgin the service via mobile device:
While the return to 83% reverses last quarter’s 1% slide, it’s still not meaningful growth on the mobile side.
In short, Twitter’s audience really hasn’t grown. Part of this may be saturation, but the other part is a perception that the service is unfriendly, both to new users as well as bullying by existing users, topics the network has not addressed in a meaningful way yet.
What of their ad effectiveness?
After returning from the depths of a major first quarter decrease, Twitter hasn’t rebounded strongly in the third quarter. While this in itself isn’t great news, this chart of performance by quarter, year over year, is revealing:
What we see above is that 2016 has been the network’s worst performance in years, and the third quarter’s performance has been the worst ever.
What contributed to these dismal ad revenue results? Twitter attributes, in its earnings letter, 90% of its ad revenues to mobile users – but we saw above that the mobile user base isn’t growing.
Twitter cited its pivot to focusing on video as a revenue solution to re-ignite growth; however, marketers have still not re-allocated budget back to Twitter from other networks.
As a result, their average revenue per user remained flat:
Looking Ahead: What It Means for Marketing and PR
Twitter’s enduring some rough times right now, with a 9% layoff to cut costs, predominantly in their sales and marketing force. We view this as strategically unwise unless 100% of the sales and marketing people laid off were not making quota. You cannot cut your way to growth.
As such, we have downgraded Twitter as a strategic marketing platform from a must-have to cautiously optimistic. For brands and companies who have large, established Twitter followings, continue to make use of those followings, but focus on driving audiences from Twitter back to owned media properties and using robust retargeting solutions to capture that audience.
For brands and companies just starting out on their social media journey, we recommend Facebook as the premier B2C network and Twitter as the backup. If your company or brand is highly active in events, conferences, and tradeshows, Twitter is still a must-have. If you are simply looking for broad audiences to reach, Twitter is not the first place to go.
For B2B marketers, Twitter is still relevant for any customer involved in the events space or is a major brand. For new B2B companies, Twitter may make sense in certain contexts, but we would not advise going all-in only on Twitter. Use a blended social media strategy of Facebook, LinkedIn, and Twitter.
We do hope Twitter turns around its fortunes. Time will tell whether they can or not. Hedge your bets until then.
Christopher S. Penn
Vice President, Marketing Technology
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