Ad­ver­tis­ing dip fails to tar­nish record rise in Twit­ter users

The Daily Telegraph - Business - - Technology Intelligen­ce - By Hannah Boland

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.”

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