Twitter tweaks strategy to woo advertisers as Q2 ad revenue dwarfs against Facebook

Twitter and Facebook have always wrestled in every aspect to gain popularity and when we take a look at the quarter reports Facebook seems to have moved ahead in the race. We make a comparison between Twitter and Facebook and see how they have fared in the second quarter of 2016 and the measures Twitter is taking to improve its numbers

e4m by Ronald Menezes
Updated: Aug 19, 2016 8:00 AM
Twitter tweaks strategy to woo advertisers as Q2 ad revenue dwarfs against Facebook

Facebook and Twitter have been in a neck to neck battle even before the onset of other social media platforms like Snapchat and Instagram. Facebook, however, seems to win the battle all the time in every aspect.

Twitter has seemingly struggled to increase its user base and woo advertisers towards it. In a bid to revive their falling popularity and attract more advertising revenues, Twitter has tied up with Major League Baseball and National Basketball Association and this could be a turning point for the company. 

With many changes in the pipeline and a few already implemented, Jack Dorsey, Twitter’s CEO said “We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage. We remain focused on improving our service to make it fast, simple and easy to use, like the ability to watch live-streaming video events unfold and the commentary around them.”

Twitter is currently focusing on live sports, news, politics and entertainment by bringing more live streaming content to the site and hopes it will spur additional advertising.

Making a comparison between Twitter and Facebook shows how they have fared in the second quarter of 2016 and the measures that Twitter is taking to improve its numbers.

FB Vs Twitter - Mobile Ad Revenues

Mobile ads are playing a major role in Twitter and Facebook’s revenues. Facebook’s ad revenue was recorded at $6.24 billion while its mobile ad revenue contributed massively with an 84 percent share of $5.2 billion. This records an 81 percent increase year on year.

“We're improving the experience for our community by helping them build more relevant and engaging ads," CEO Mark Zuckerberg told investors on a conference call.

On the other hand advertising revenue for Twitter stands at $535 million, an increase of 18 percent year on year. Mobile advertising was 89 percent of the total ad revenue. But a poor user growth may be a big drawback as advertisers would think twice before investing. Twitter has predicted revenues in the range of $590 million to $610 million in Q3.

The cost per ad engagement stood at 64 percent in Q2 2016.

FB Vs Twitter - User Base

 At 1.71 Facebook billion users the growth is up from 1.65 billion in Q1 and it adding more than 600 million users in the space of one quarter.

The Monthly Active Users (MAUs) were 1.71 billion as of June 30, 2016, an increase of 15 percent year on year while the mobile MAUs were 1.57 billion, seeing an increase of 20 percent year on year.

Compared to Facebook, Twitter just added 3 million users in the second quarter. The MAUs for Twitter stood at 313 million at the end of the second quarter of 2016, up from 310 million at the end of the first quarter and up 3 percent year on year. The company said mobile MAUs represented 82 percent of total MAUs.

Twitter’s Plan B to woo advertisers

Twitter is trying to make changes and attract users and advertisers. It has made changes to its timeline algorithms to show more sticky tweets in the timeline rather than chronologically placing them and has contemplated on extending its 140 character limit.

Along with taking strides in areas such as Augmented Reality and Virtual Reality with the acquisition of Magic Pony Tails Technologies, Twitter is making efforts to get more content on the platform.

However, it’s too early to call any signs of resurrection that brighter days are ahead for Twitter. Brands like Anheuser-Busch InBev, Nestlé, Sony Pictures and Verizon Communications are expected to be on board advertising within the new live streaming content on Twitter.

“In addition to our work on reach and frequency buying, we also introduced an easier way to serve skippable, pre-roll ads of any length in front of the most premium mobile videos. Twitter pre-roll will support Video Ad Serving Templates (VAST) through select Ads API partners. VAST is a universal protocol that standardizes communication between ad servers and video players. With this feature, advertisers can programmatically have their pre-roll ads served in front of premium content with hundreds of publishers. The ability to use VAST (exclusively available via the Ads API and currently in beta in the U.S.) is available through four of our Ads API partners: AdParlor, Amobee Brand Intelligence, TubeMogul and Visible Measures.” Twitter mentioned.               

The Twitter Audience Platform is made available and the Twitter Dashboard too was announced in Q2 and the Twitter Dashboard gives businesses an advantage in the way they use Twitter.

With all kinds of moves being made to make Twitter a powerful source of advertising revenue Facebook is flexing its muscles and growing like never before. This could surely ring alarm bells for those at Twitter and make the most of the resources to make it a social media powerhouse.

Jack Dorsey says “Twitter is what’s happening now, whether it’s breaking news, entertainment, sports, or other everyday topics, seeing what’s happening and watching live events unfold with the conversations around them; that’s the power of Twitter.” 

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