Twitter appeared to be recovering quickly and surely from the impact of Covid as it reported a huge jump in total and ad revenue in its Q3 results, revealed yesterday (October 29). Ad revenue jumped 44% from the last quarter and 15% year-on-year to clock in at US$808 million. Overall revenue came in at US$936 million, a 37% jump sequentially and 14% from the same period last year.
The social-media platform said that advertisers significantly increased their spend in Q3 due to the return of events and increased product launches. During the quarter, the platform also introduced a series of new ad formats for brands including a Branded Likes beta which allows advertisers to customise the like button with animated brand imagery; a rebuild of the First View ad format which drove up ad impressions; and a redesign of its Amplify pre-roll video ads.
Twitter Q3 2020 earnings snapshot
In terms of monetisable daily active usage (MDAU), its key metric that indicates the number of real users exposed to advertising per day, the total reached 187 million, up 29% YOY. Out of this number, 152 million were outside of the US.
“We have grown our daily audience by 42 million in the last year as people all around the world come to Twitter to find out about the topics and events they care about most,” Twitter CEO Jack Dorsey said in a statement. “I’m pleased MDAU grew 29% year over year to 187 million, driven by global conversation around current events and product improvements.”
The ‘product improvements’ Dorsey refers to includes organising content around ‘Topics’ and ‘Interests’, which led to the number of accounts following Topics to grow, reaching 70 million by the end of the quarter. New conversation settings also launched in Q3, a tool that allowed for more control over the conversations people start on Twitter. Additionally, the platform began experimenting with a prompt that encourages people to read an article if they attempt to retweet it without reading beyond the headline.
On whether Twitter’s revenue improvement can be partly attributed to a major advertiser boycott on rival Facebook in the last quarter, Twitter CFO Ned Segal said that it was difficult to unpack different components of the company’s strength from Q3. Incidentally, Facebook recorded a 22% YOY jump in ad revenue in Q3, to US$21.22 billion.
“The decisions that we make, how we make them, how we communicate them, we think [it’s] making it easier for advertisers to choose Twitter with their next dollar than to put it somewhere else,” Segal said during the earnings call.
On his outlook on Q4, Segal projects that the shopping and holiday season is likely to play out differently for the company than it has historically. “This buying season may be accelerated, and [it would be] even more digital in terms of advertising and delivery of goods and services," he said. "[This] hopefully creates a good setup for Twitter."
Segal added that unpredictability surrounds civil unrest in the US as well as the impending presidential election, but the company has “no reason to believe” that the election results could affect revenue in Q4.
“As we look ahead, the fourth quarter is typically seasonally slower for us in terms of MDAU, but with the increased activity around the US election…” said Segal. “We feel like [it] has the potential to benefit us in terms of MDAU growth in Q4 and beyond.”