Twitter released its second quarterly results report as a publicly traded company, detailing its numbers for the first quarter of 2014. As soon as the numbers came in, Wall Street reacted negatively, punishing the stock with a 11% decline in after hours trading. The headlines were equally dramatic:
Twitter stock drops 11% despite revenue growth – LA Times
Twitter beats estimates but growth fails to impress – USA Today
Revenue Up at Twitter, but Growth Is a Worry – NY Times
Twitter User Growth Dip Drives Stock to Lowest Since Debut – Bloomberg
Who has the right of it here? Is the social network headed for the land of the passenger pigeon and the dodo?
Not so fast. Let’s see where Twitter actually stands. It’s currently at 255 million monthly active users:
Note that in the graph above, we’ve superimposed a 4-period moving average, meaning the moving average across four quarters, or the year. Twitter isn’t in danger of crossing under its 4-period moving average, which would be a clear indicator that its growth is in danger. Alarmist headlines be damned. As far as how fast it is or isn’t growing, let’s take a look:
Here, the monthly active user growth rate has actually increased and converged with the 4-period moving average. Growth, contrary to the headlines above, is headed in the right direction. 4Q2013 was definitely soft, with a 4% growth rate, but Twitter is back to 6% growth. How about the revenue perspective? Is Twitter on solid ground?
At first, it looks like revenue was flat. Remember, however, from Facebook’s quarterly report, that there’s a trend of the first quarter of each year showing little to no growth because of how aggressively companies spend on B2C advertising in the fourth quarter and how drastic the pullback is in the first quarter. When we look at the revenues from advertising and their rate of change:
We see that Twitter remains ahead of Facebook in the revenue game, at least in terms of rate of change. Twitter has not gone negative in the first quarter either this year or last year, whereas Facebook was down -8%, -6%, and -3% for its first quarters in recent years. Twitter has shown the same year over year growth bump in the first quarter that Facebook has – even in soft periods, both are growing revenue. To dig in a bit more, let’s look at Twitter’s revenue per user:
Revenue isn’t just up, revenue is trending up and accelerating. The trend line is curving upwards, a positive, powerful sign that Twitter has got revenue going strong. These numbers would suggest that Twitter is on solid footing.
What does all of this mean for marketing and communications professionals?
Marketing and communications professionals should be leveraging Twitter’s platform for advertising, paid media, syndication, and retargeting. The sooner marketers and PR professionals can learn all of Twitter’s media options, the sooner they can amplify the impact of their earned media campaigns.
Twitter CEO Dick Costolo trumpeted that with the integration of MoPub, Twitter is now the largest in-app mobile ad exchange (something that Facebook is likely to offer at this week’s F8 conference) with over 1 billion iOS and Android users. In-app mobile ad exchanges, to the extent that there is a next big thing, are going to be a next big thing. Especially as options become generally available for businesses of all sizes. Despite the headlines, everything is looking very good for Twitter in the coming quarters.
Consider that according to Edison Research, smartphones have achieved 78% penetration into the US 12-24 population, and suddenly native advertising inside mobile apps is a giant opportunity. As MoPub rolls out, be prepared to spend more on native advertising in mobile to complement your earned and owned media wins. The ability to show ads in mobile apps for everything from an earned media hit to the latest product launch will be a huge boon to marketing communicators; plan accordingly by developing your integrated marketing strategy now.
This article was syndicated from Business 2 Community: State of Social 1Q14: Twitter, Reasons for Optimism, the Next Big Thing
More Social articles from Business 2 Community:
- Why Sales Leaders Are Falling In Love With Social Selling
- 5 Ways Brands Get Noticed On Social Media
- Instagram Sees The Highest Amount of Engagement Of Any Social Network [Study]
- 7 Ways to Create Content Your Audience Wants to Share
- 4 SEO Techniques That You Need To Avoid
- Social & Online Media