Twitter has lived 2015 with ‘mixed-emotions’. In the fourth quarter of 2015 the company tried two big things to get more people to use its social networking site. Firstly, it introduced a new feature, Moments, to make it easier for users to keep up with the news-making stories around the globe. Secondly, in an attempt to further encourage users to join Moments, Twitter launched its first integrated marketing campaign. Neither of these attempts have been enough to compensate for the number of people who stopped using Twitter in the previous quarter.
The fourth quarter has historically been the worst quarter for Twitter, and the year has been no different. Twitter explained in its shareholder’s letter that the fourth quarter saw “positive impacts from marketing initiatives which contributed meaningfully to MAU growth; however, these were more than offset by organic declines, partially due to fourth quarter seasonal trends. We saw a decline in monthly active usage in Q4, but we’ve already seen January monthly actives bounce back to Q3 levels. We’re confident that, with disciplined execution, this growth trend will continue over time”.
After its year closing, Twitter said its monthly visitors in the fourth quarter totaled 320 million. This is exactly the same as the previous quarter. While the number was up 9 percent from a year ago, when monthly active users stood at 288 million, the figures showed that the recent attempts to attract new users made little impact.
On the brighter side, the company reported fourth quarter earnings of USD 710 million in revenue. This represents a 48 percent increase against USD 479 million in the year-ago period. Twitter’s advertising business is also growing. In the fourth quarter the company made USD 641 million from advertising, which is 48 percent up year-over-year. Most of this came from ads shown on its own properties. In the fourth quarter ad revenue from ads shown on Twitter’s site or apps totaled USD 556 million which estimates for 87 percent of its total ad revenue.
Twitter’s advertising business has become increasingly video-centric. According to Twitter, 33 percent of the brands that buy ads from Twitter’s sales team directly have bought video ads. This would mean that Twitter made approximately 50 percent more money from video ads in the fourth quarter than the third quarter.
The social media company said it saw a 153 percent year-over-year increase in ad engagement during the fourth quarter, but it also faced a 41 percent decrease in cost per engagement (CPE) against the comparable year-ago period. Twitter attributed that fall to the shift to auto-play video, which delivers more engagement at a much lower average CPE than click-to-play video ads.
“I have spent the past six months developing a stronger point of view of what Twitter is and what it wants to be, and that’s the notion of being ‘live’ whether it’s live commentary, live conversations, or live connections in breaking news, entertainment, sports, or everyday topics,” said Jack Dorsey, CEO, Twitter.
To strengthen this, Mr Dorsey said the company will refine its core service, add live-streaming video and build off success of Periscope, offer best tools for creators, make it safe for people to express themselves, and help developers build and grow their businesses using Twitter. He also acknowledged that Twitter can be confusing, and that there are “broken windows” that inhibit growth and retention.
