Twitter released its third-quarter earnings results on Thursday morning. Here’s a quick rundown of how the social network’s business is doing.
Twitter continues to make money but not a profit
Twitter has not turned a profit since at least the first quarter of 2012. Despite total revenue growing by 8% year-over-year to $615.9 million and advertising revenue growing by 6% year-over-year to $545.0 million, in Q3 2016 the company recorded a net loss of $102.9 million.
Twitter’s ad revenue continues to decelerate
Twitter’s year-over-year advertising revenue growth peaked at 129% in Q2 2014 and has been on a slowdown ever since. The growth rate for Q3 2016: 6%.
Twitter’s audience size continues to grow slowly
Cup half-full: Twitter’s total and U.S. only monthly active user numbers are growing. Cup half-empty: They’re growing by low single-digit percentages year-over-year. In Q3 2016 Twitter’s total monthly audience averaged 317 million people, and its U.S. monthly audience averaged 67 million people.
Twitter continues to get more people engaging with ads but at lower prices
Since Q1 2015, the number of times people engage with ads on Twitter — by clicking on their links, watching their videos, retweeting them, etc. — has gone up and up, up 91% year-over-year in Q3 2016. But since Q3 2015, the amount of money Twitter makes per ad engagement has gone down and down, down 44% in Q3 2016.
Twitter’s ad network revenue did not continue to grow
Twitter has made money from running its ads on other publishers’ apps and sites since at least the third quarter of 2014 when that business generated $5.0 million in revenue. Two years later, it’s still very much a side business — and one that failed to grow this quarter. In the third quarter, it brought in $58 million in revenue, a 12% decline compared to a year ago. Compared to the money from ads appearing on Twitter proper, it’s pocket change. That on-Twitter ad revenue hit $487 million, which is 9% more than last year.
About The Author
Tim Peterson, Third Door Media’s Social Media Reporter, has been covering the digital marketing industry since 2011. He has reported for Advertising Age, Adweek and Direct Marketing News. A born-and-raised Angeleno who graduated from New York University, he currently lives in Los Angeles. He has broken stories on Snapchat’s ad plans, Hulu founding CEO Jason Kilar’s attempt to take on YouTube and the assemblage of Amazon’s ad-tech stack; analyzed YouTube’s programming strategy, Facebook’s ad-tech ambitions and ad blocking’s rise; and documented digital video’s biggest annual event VidCon, BuzzFeed’s branded video production process and Snapchat Discover’s ad load six months after launch. He has also developed tools to monitor brands’ early adoption of live-streaming apps, compare Yahoo’s and Google’s search designs and examine the NFL’s YouTube and Facebook video strategies.
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Author: Tim Peterson