Twitter is still struggling for users—but its latest earnings report signaled a light at the end of the tunnel.
On Thursday, the company reported a big drop in its monthly active users statistics, which it said was due to its efforts to clean up its platform.
The social network had 326 million monthly active users for the three months ending in September, a significant drop from 335 million in the previous quarter and 330 million in the same period a year earlier. In the United States, the number of monthly active users fell to 67 million from 68 million in the prior quarter.
Twitter blamed the fall on European's new privacy law, the company's efforts to stamp out toxic conversations involving misogyny and racism, decisions not to move to paid carrier relationships in some markets, and tweaks to the platform meant to reduce automated use. It also blamed a "technical issue" that reduced how many notifications people received.Twitter said it had seen a 20% reduction from the previous quarter in "successful sign-ups" from automated, spammy, or malicious accounts.
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The decline wasn’t unexpected. Twitter said last month that it had begun wiping out bad accounts far more rapidly. And the company warned that it could lose “mid-single-digit millions” more in the coming months, due to new technology that helped spot bad actors and prevent them from getting on the platform in the first place. Evidently, Twitter ended up wiping out more bad accounts than it added real accounts. (Or it lost some real ones, too.)
Twitter has struggled in recent months with abusive user behavior and backlash over its decisions to remove—or keep—certain Twitter users. In September, it banned controversial “Infowars” host Alex Jones, weeks after other social media and tech platforms removed him and his content.
Twitter’s chief touted the efforts to clean up the platform’s image.
Twitter’s press release read, in part:
“We’re achieving meaningful progress in our efforts to make Twitter a healthier and valuable everyday service," said Jack Dorsey, Twitter's CEO. “We’re doing a better job detecting and removing spammy and suspicious accounts at sign-up. We're also continuing to introduce improvements that make it easier for people to follow events, topics and interests on Twitter, like adding support for U.S. TV shows in our new event infrastructure. This quarter’s strong results prove we can prioritize the long-term health of Twitter while growing the number of people who participate in public conversation.”
Even though Twitter’s monthly active user numbers have significantly lowered, the company reported revenues exceeded investor expectations.
CNN Business reported:
That pitch appears to be working with advertisers. Twitter's sales hit $758 million for the quarter, a nearly 30% increase from a year prior, on the strength of its ad sales business. Twitter also continued its streak of profitable quarters, posting a net income of $106 million for the three month period.
Of the $758 million revenue for the quarter, $650 million was made from advertising partners. Twitter reported that video ads make up more than half of its advertising gains, so communicators should expect to see a continued push for video content on Twitter.
… The company says that the "video website card" format is "becoming the format of choice when an advertiser launches a campaign." So expect to see more videos popping up on Twitter, especially from big sponsors. In addition, Twitter made an extra $108 million from its data licensing division.
Along with strong revenue numbers, Twitter also reported steadily rising earnings.
… [H]ere’s another sign the business is improving: Twitter’s adjusted earnings were $295 million for the quarter, which were up 39 percent year-over-year.It was Twitter’s largest quarterly profit ever, and certainly a sign that the business — which has been somewhat disappointing in years past, thanks to the company’s user growth issues — has stabilized.
“We have a more engaged audience and we are delivering a better return on investment for advertisers,” Chief Financial Officer Ned Segal said in an interview. “We are now seeing the fruits of our labor and going into the fourth quarter we have the wind in our backs.”
So, Twitter is arguing that although its monthly active user number dropped a large amount, the process is creating more loyal users—which, hopefully, will encourage future growth. The platform also reported increased daily user numbers.
Business Insider reported:
The company doesn't disclose daily active users but says this is a more important metric than monthly active users. Daily active users grew 9% over the quarter, which the company said was slower than expected because of its efforts to combat spam.
“There’s lots of opportunity to convert them into daily users as we continue to improve all kinds of things around the service, from the notifications you get around Twitter to continuing to improve the timeline,” Segal said. “Our onboarding process can get much better as well. We just need to make it easier for people to find the things that people are looking for on Twitter.”
Business Insider reported:
Twitter's share price was up more than 10% in premarket trading as investors took courage from the firm's 29% year-on-year revenue rise.
How does this news change your outlook on using Twitter in digital PR and marketing strategies, PR Daily users?
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