‘MENA IS AMONG THE MOST EXCITING MARKETS TWITTER OPERATES IN’
Head of global revenue Matthew Derella tells John Everington about his strategy for revenue growth in the region
For advertisers, reaching people isn’t the problem, it is getting people to pay attention to your actual ads
Twitter’s Matthew Derella is a man on a mission.
The company’s head of global revenue and operations is responsible for no less of a task than converting the messaging service’s ubiquitous role in the global conversation on news, politics, sports, entertainment and anything else you can think of (and plenty you can’t) into advertising revenues.
That is no easy task, given intense competition for those advertising dollars from the likes of Facebook, Snapchat and Instagram.
For Mr Derella and Twitter (and its competitors), the Mena region is of crucial importance, with its rising population providing much needed growth for the messenger service.
“Mena has been one of our strongest performing markets in terms of growth,” Mr Derella said on a recent visit to Dubai.
“When I look across the region, especially markets like Saudi Arabia that are so important, we’re seeing some of the most explosive growth that we’ve ever seen in that market now, and that’s building off a pretty substantial base.”
Put simply, the challenge for Twitter and Mr Derella is to connect that user base to advertisers to generate revenues, something already achieved to spectacular effect by the likes of Facebook and Google.
Twitter, however, has found the going tough, especially in recent months, in the wake of sluggish global user growth. The service’s monthly active users (MAUs) base worldwide was unchanged at the end of June compared with the end of March, standing at 328 million. International growth offset a decline in US-based MAUs, which fell by 2 per cent during the quarter.
That is a problem when you are pitching yourself to big brands, who look for keen engagement from a growing user base when deciding where to allocate their advertising spending. Twitter’s advertising engagements grew by just 4 per cent quarter-on-quarter, with advertising revenues falling 8 per cent year-on- year.
“We continue to see rising competition for advertising dollars from other social media companies making it difficult for Twitter to resume revenue growth in the near future,” said Victor Anthony, an equity analyst at Aegis Capital following the company’s latest results announcement in July.
“Facebook and Google siphoned away an incremental US$12.5 billion of ad dollars away from the industry in 1H17, and we expect that trend to continue.”
Hence the importance of Mena to Twitter, where the company can sell high levels of engagement and growing user numbers to advertisers.
An example of the importance of Arabic-speaking Twitter users in the Middle East and elsewhere came last year, when the company’s founder Jack Dorsey tweeted out Ramadan greetings. The tweet would go on to become his second most retweeted message.
Within the Mena region, no market is of higher importance than Saudi Arabia; while the company rarely breaks down its user base outside the US, Mr Derella noted that the kingdom is one of Twitter’s top 10 markets worldwide. “From my position it’s one of the most exciting markets in any that we work in in terms of usage growth and the opportunity for advertisers,” he said.
The service’s popularity was demonstrated in January 2015, when King Salman’s ascension to the Saudi throne was announced via Twitter following the death of King Abdullah. The official tweet was retweeted 375,000 times, making it the sixthmost retweeted post globally for the year.
Twitter has been working hard to capitalise on such engagement in the past 12 months in particular, with a series of partnerships with local content providers and advertisers, in order to further captivate users’ attention and to monetise it, with localised video content front and centre.
“One of the areas in the product development that we’ve seen that really does a phenomenal job in showing what’s happening in the world is with video,” said Mr Derella. “It’s driving outstanding performance for our brands.”
Live video and exclusive content in particular is significant for Twitter and its competitors as a means of attracting and keeping users’ attention.
Earlier this year Twitter announced 12 high-profile content streaming deals in the US, including a 24/7 Bloomberg news channel, selected concerts from Live Nation and live action from golf’s PGA Tour.
These came following the service’s first significant live broadcast deal last year, paying US$10 million for the right to live stream 10 Thursday night National Football League (NFL) American football games.
Twitter in the past year has signed 27 agreements with key publishers contents in the Mena region for its In Stream video sponsorship programme, which enables brands to sponsor premium video across a wide range of content ranging from news to sports to entertainment.
The company’s first live-stream event in the Mena region was on New Year’s Eve, 2016, when it partnered with Emaar to live stream its fireworks display. The campaign generated 3.7 million video views.
This was followed in the summer with a partnership with Sela Sports in June to live stream 21 matches from the 2017 Arab Championship regional football tournament, Twitter’s first ever football live streaming deal worldwide.
Mr Derella claimed Twitter’s ability to live stream such events, with viewers commenting via tweets in real time, is particularly attractive to advertisers.
“It’s almost like you punch a hole in the timeline and take users directly into the experience,” he said. “Brands are hungry to connect with audiences that are passionate and engaged with that content.”
He gave the example of an advertising campaign during the semi-final and final stages of the Arab Championship in early August by the fastfood chain Hardee’s, which displayed ads both during live streamed games and before highlights packages, generating 2 million views.
“For advertisers, reaching people isn’t the problem, the problem is getting people to pay attention to your actual ads,” said Mr Derella.
“That’s where Twitter has an advantage because it’s a place that aggregates an incredibly attentive viewer or user that’s in a discovery mindset. We really deliver a higher level of engagement than a lot of our competitors, and for an advertiser that means a better return.
“We think video, specifically, is a place where we have very strong difference from anyone else out there and demand we’re seeing from the US and more locally from, for example, the Arab Championship, gives me a lot of confidence that we’re on the right path.”
In addition to live sports, Twitter has been in talks with local news outlets about offering live news on its platform, with no details forthcoming yet.
Aside from live video, Mr Derella noted how regional brands combined effectively during Ramadan with local content providers including Khalejia, Layalina and Fatafeat for Twitter-based content.
In one such pairing, the food and lifestyle channel Fatafeat produced a series of video dessert recipes featuring Nestlé brands, with Nestlé running a series of pre-roll ads. The videos received 4.4 million impressions, including 1.2 million views delivered to female viewers, most of whom were Saudi-based.
Mr Derella also pointed to the example of Twitter’s partnership with Land Rover for the launch of its new Discovery model in March. The launch, streamed live in 360-degree video via Twitter’s Periscope 360 platform, garnered over 400,000 views.
Twitter is realistic that it is not the only player in town and will face tough competition across its advertising business, especially when it comes to video. The company earlier this year was unable to renew its high-profile NFL deal in the United States, losing out to a $50 million bid from Amazon.
Mr Derella conceded that the competition will be tough in terms of video and advertising, but insisted Twitter still has an edge on its competitors.
“Competition will come, [but] we have a clear and long-term plan that I think aligns with what we’re best at and the overall trends in the industry. Based on the evidence I’ve seen so far, I think we’re just starting to tap into opportunity for brands,” he said.
“No one else can deliver content faster than we can, no one else has more comprehensive content than we do, and no one has the live discussion around the content that’s happening, and no one can deliver it in as personalised a way as we can.”