Twitter’s Advertising Business on The Way to Recovery
Twitter’s advertising business has been on the rebound after experiencing a downturn in revenue during the pandemic. As the world reopens and businesses increase their marketing spend, Twitter’s advertising revenue has bounced back, leading to renewed investor confidence in the platform. Here, we’ll explore Twitter’s advertising business recovery and hear from two experts about the potential impact of this recovery on the future of the platform.
Twitter’s advertising business suffered a significant blow during the pandemic, with revenue dropping by 23% in the second quarter of 2020. However, the platform has since experienced a rebound in advertising revenue, with revenue up 32% year-over-year in the first quarter of 2021.
As eMarketer forecasting analyst at Insider Intelligence, Peter Vahle, says, “Twitter’s advertising business has been on the rebound as the world reopens and businesses increase their marketing spend. The platform’s ad revenue growth is expected to continue throughout 2021 and beyond, driven by factors such as increased ad engagement, better ad targeting capabilities, and growth in its self-serve ad platform.”
One of the factors driving Twitter’s advertising revenue growth is increased ad engagement. The platform has seen an increase in daily active users, with the company reporting 199 million monetizable daily active users in the first quarter of 2021, up from 166 million in the same period in 2020.
As Vahle says, “Twitter’s increase in daily active users has led to increased ad engagement on the platform, with more users seeing and interacting with ads. This increased engagement is driving higher ad revenue for the platform.”
Another factor driving Twitter’s advertising revenue growth is its improved ad targeting capabilities. The platform has made serious investments in improving its ad targeting technology, allowing advertisers to more precisely target their ads to specific audiences.
As Kathleen Davis, Chief Strategy Officer at Code and Theory, says, “Twitter’s improved ad targeting capabilities have been a game-changer for advertisers, allowing them to more effectively reach their target audiences and drive higher ROI from their ad spend. This improved targeting is likely a significant factor driving the platform’s advertising revenue recovery.”
Twitter has also seen growth in its self-serve ad platform, allowing small and medium-sized businesses to create and manage their own ad campaigns.
As Vahle says, “Twitter’s self-serve ad platform has been a significant driver of ad revenue growth, particularly among small and medium-sized businesses. This platform allows these businesses to create and manage their own ad campaigns on Twitter, which has led to increased advertising spend on the platform.”
In summary, Twitter’s advertising business has experienced a significant revenue rebound, driven by increased ad engagement, improved ad targeting capabilities, and growth in its self-serve ad platform. The growth of the platform’s user base, investment in new advertising offerings, and overall recovery of the advertising industry are all contributing factors. As the world continues to reopen and businesses increase their marketing spend, Twitter is well-positioned to continue its advertising revenue growth and remain a key player in the digital advertising industry.
As Davis says, “Twitter’s advertising business recovery is an encouraging sign for the platform and its investors, demonstrating the resilience and adaptability of the platform in the face of challenges. As Twitter continues to innovate and improve its advertising capabilities, it is likely to remain a key player in the digital advertising industry for years to come.”