Twitter’s ad revenue grew 18 percent year-over-year to $535 million in Q2. Ad engagement climbed by 226 percent and the cost per engagement fell by 64 percent.
But it’s not all good news. Twitter said that they are “seeing a continuation of the trends discussed last quarter with less overall advertiser demand than expected. This is reflected in both our Q2 performance and Q3 outlook.”
Why Advertisers Are Abandoning Twitter
The company cited two reasons why advertiser demand is down:
First, there is increased competition for social marketing budgets, which requires us to continuously raise the quality bar on the advertising solutions we bring to market.
Second, while we have worked to drive higher ROI for advertisers (by leveraging our current user base, ad formats and innovations in targeting, creative and measurement), we’re still priced at a premium CPE relative to others. This has proven to be a headwind in growing Twitter’s share of overall social budgets and in our ability to grow faster in both video and performance advertising.
Indeed, advertisers are looking at newer and shinier social platforms like Snapchat, which has already surpassed Twitter in active daily users.
Twitter also reported that monthly active users grew by 3 percent year-over-year to 313 million during the quarter. Mobile users accounted for 82 percent of Twitter’s user base.
What’s Next For Twitter?
On Monday, Twitter announced a fresh “new look and feel” to its marketing efforts to emphasize to non-users what Twitter is all about. Twitter wants to be known as the place “where you go to see what’s happening everywhere in the world right now.”
No doubt, Twitter is hoping its new efforts will help expand its user base. In Q2, the company added just 3 million new users.
Twitter has been pushing hard into live streaming of sports. The company has signed deals to show games from all the largest U.S. sports leagues (NFL, MLB, NBA, NHL).
Will Twitter’s efforts help start a much-needed turnaround? Or is it too late?
