Twitter shares have dropped 10 percent as revenue outlook disappoints, in relation to the fourth-quarter earning (up to December 2018). What do these earnings figures mean for Twitter going forwards? Investing.com Senior Analyst, Haris Anwar provides some analysis for Digital Journal.
While Twitter is not hitting big revenue heights the company has added new content and cleared itself of fake accounts. Part of Twitter’s recent success has been attributable to its use of video content, which has offered a more varied experience for users, taking the service beyond a glorified messaging service.
According to Anwar, the wider user of video content is paying off: “The company’s success in attracting ad dollars is largely the result of its push to expand video content.”
This is helping to attract advertising, with the wider use of video content: “It is resonating very well with advertisers and this strategy will continue to strengthen Twitter’s appeal. The video segment now accounts for more than half of Twitter’s ad revenue.”
Further with advertising, Anwar notes that, “Twitter is also well positioned to benefit from the large shift in dollars toward mobile and native advertising.”
Native advertising is a type of advertising, mostly online, that matches the look, form and function of the platform upon which it appears.
One change that Twitter has made recently, and which leaves it in a more robust state, is cleaning up its users and removing fake accounts. This has led to a decline in users, but advertisers can be more sure that those seeing their ads are real people. The purge has also helped to raise the credibility of Twitter overall.
This was partly undertaken in order to send the right signal to those who financially support the company. As Anwar tells us: “By quickly acting to clean up its platform, Twitter has convinced investors they should ignore user engagement numbers while the company makes its platform more acceptable to regulators… In the current environment, it’s a very smart move.”
This certainly puts Twitter in a stronger position than Facebook, in terms of the reliability of its users and content. In terms of Facebook, Digital Journal has analysed Facebook’s recent woes (“Facebook turns 15, but it’s not such a happy day”).
Overall, Anwar’s assessment is that Twitter’s future prospects are looking very good. His analysis runs: “With meaningful progress toward improving its content quality and advertisers’ willingness to value the platform’s transparency and strength, I believe Twitter will be able to attract additional user engagement going forward.”
