Twitter just announced its first quarter earnings report for 2014, with impressive gains in advertising: total revenue grew 119% year-over-year, with 90% of those earnings coming from advertising. Of that advertising revenue, a huge chunk – 80% – came from mobile. Not too surprising, since 78% of Twitter’s total monthly active users are now on mobile (VentureBeat).
However, user growth was disappointing for the platform. Twitter added 14 million monthly active users, and only 3 million of those in the U.S. To compare total numbers, Facebook has 202 million monthly users in the U.S. vs. Twitter’s 57 million.
New users outside the U.S. are not as lucrative for the company. Ad revenue per thousand timeline views is $3.47 for U.S. users, but only $0.61 for international users. However, overall ad revenue per thousand timeline views did rise significantly for the company, up 96% to $1.44 (AdAge).
If user growth continues to stall, how long will Twitter’s ad revenues stay on the rise?
A revised forecast for advertising spending on Twitter estimates the site will earn close to $1 billion in 2014, according to eMarketer. This year, Twitter will earn $582.8 million in global ad revenue; a impressive 53% of that will come from mobile advertising. The estimate shows marked growth in earnings from mobile advertising, which accounted for “virtually no ad revenue” back in 2011.
This year, Twitter will early $308.9 million from mobile ad revenue; that number is higher than Twitter’s total ad earn in 2012 (and more than double the platform’s revenue from mobile ads in 2012).
By 2015, Twitter’s worldwide ad revenue will total $1.33 billion, over 60% of which will come from mobile advertising.
Three factors led eMarketer to make upward revisions for mobile advertising on Twitter:
- advertisers have shown more interest in spending money on mobile advertisements on Twitter
- recent audience figures from multiple research sources suggest Twitter’s reach is improving
- the platform is benefitting from increased focus on mobile by competitors like Google and Facebook; they have also worked to convince advertisers to shift dollars to mobile devices
Mobile advertising will clearly play a significant role in Twitter’s revenue in the future – are you surprised that it already accounts for the majority of ad revenue?
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Twitter’s Ad Revenue Reaches $139.5 Million in 2011
The Wall Street Journal reports that Twitter is working towards being ready for an initial public offering, and ad revenue for the site reached $139.5 million in 2011. In comparison, ad revenue at Facebook (which has plans to go public in May 2012) is 22 times larger, at $3.15 billion.
How does this relate to user numbers? Facebook is two years older and now boasts over 845 million users, compared to Twitter’s 500 million users.
So Facebook’s audience is just 1.69 times larger than Twitter’s, but the social networking giant’s ad revenue is a whopping 22 times larger. What will Twitter do to win over more advertisers? The company has taken two steps recently: selling ads to small businesses for the first time, and starting to show a full range of ads to mobile users. Will these changes provide a significant boost to Twitter’s ad revenue?
eMarketer expects Twitter to earn $150 million in revenues this year, the vast majority of which will come from the US. This represents a substantial increase over the company’s 2010 revenues of $45 million. eMarketer forecasts that by 2012, Twitter revenues will reach $250 million, passing MySpace in revenue generated. Continue reading