Advertising dip fails to tarnish record rise in Twitter users
TWITTER experienced record growth in users in the three months to June as people continued to flock online, but saw sales figures hammered by brands reining in spending.
The social media site said it grew user numbers by 34pc year-on-year in the three months to the end of June, meaning it had 186 million monetisable daily active users.
This is the largest year-on-year increase since Twitter started reporting the metric four years ago.
Jasmine Enberg, an analyst at eMarketer, said it was a sign that “housebound consumers continued to use the platform to follow news about the coronavirus and other current events”.
However, despite more people using Twitter, its revenue slipped 19pc for the period ending June 30, to $683m (£535m), after advertising spend dropped almost a quarter.
It said Covid-19 and US civil unrest were behind the slump. This meant it recorded an operating loss of $124m, a larger slump than analysts had been expecting. Around 80pc of Twitter’s revenue comes from advertising.
Twitter signalled an upturn could be on the cards though, saying it saw a “gradual, moderate recovery” in the amount brands were spending compared to the last three weeks of March. By the end of June, it said spending was down just 15pc year-on-year.
“Demand gradually improved once brands returned after the protests subsided,” Twitter said.
The latest figures come just days after Twitter was hit by a high-profile hack which saw the accounts of politicians, celebrities and billionaires hijacked and used to promote a Bitcoin scam. The company did not address whether the breach had affected user numbers in its earnings report, or provide forecasts for users in the coming quarter.
However, Ned Segal, Twitter’s chief financial officer, said: “Typically, when we see something like this, we find that although this is a challenging time for people who use the service, if we’re transparent ... that we can work through this.”
Dr Ben Marder, from the University of Edinburgh Business School, said: “The answer is that 99.99pc of its user base simply do not care, and it is this portion of the pie that feeds the social media giant.”
He added: “Although these ‘mosquito bites’ are annoying and the recent one for Twitter has flared up a little, people will continue to happily keep on trekking and tweeting due to the benefits they continue to believe this platform offers.”