Twitter’s Q1 2015 earnings call wasn’t great for the company. While the disappointing user growth and revenues continue, the earnings also made onto the Internet before the cessation of regular trading. Trading was halted for a period.
The company reported a revenue of $436 million, an increase of 74 percent on a year-over-year basis. That number missed the company’s own guidance, as well as street estimates that the company would report $456.8 million. Twitter earned $0.07 using adjusted metrics, and lost $0.25 using normal accounting methods (GAAP). The street had expected an adjusted profit of $0.04.
The company’s GAAP net profit fell during the period, compared to the year-ago quarter, expanding from negative $132.3 million, to negative $162.4 million.
Additionally, Twitter reported that its monthly active user count has reached 302 million, up 18 percent compared to the year-ago quarter, and up from 288 million in the sequentially preceding quarter. The company indicated that it sees 80 percent of its monthly actives as monthly mobile actives.
Mobile advertising constituted 89 percent of Twitter’s total ad revenues, which came to $388 million in the quarter.
Twitter’s user growth problem is finally affecting it’s revenues and investors won’t be happy with this. Twitter’s missed revenue and user growth that continues to be a problem were enough to bring down its share price by 18%.
Twitter acquires TellApart
Under the cloud of a disappointing earnings call, Twitter made some bold announcements which will only better its revenues. Twitter announced that it has acquired TellApart, a leading marketing technology company providing retailers and e-commerce advertisers with unique cross-device re-targeting capabilities.
With this new move consumers can now move fluidly between apps, devices and platforms, and performance advertisers are in need of more effective targeting and measurement tools that work seamlessly. For instance someone browses for products on a mobile device but ultimately makes a purchase on a desktop device. “Offering this seamless experience is an ongoing priority for us, as it is for the advertising industry as a whole.”
Twitter informed on its blog that TellApart will bring deep expertise in performance advertising, driving cost-effective return on investment through dynamic product ads and email marketing for clients like Neiman Marcus, Pottery Barn, Sur la Table and Wayfair.
Twitter’s deal with Google for DoubleClick
With strong investments in direct response capabilities, Twitter has been also working to simplify the measurement of conversion performance across devices. To strengthen its cross-device measurement capabilities Twitter has forged a new partnership with DoubleClick - an ad management platform purchased by Google for $3.1 billion in 2007.
Later this year, Twitter informed that advertisers will be able to use a new attribution model in DoubleClick to get a fuller understanding of how Twitter Ads served on mobile or desktop drive conversions for them across the web.
Talking about the alliance DoubleClick had to say this,” DoubleClick clients will be able to buy Twitter’s Promoted Tweet ad format via DoubleClick Bid Manager across mobile (including in-app) and desktop. We will also make it easier for marketers to measure their Twitter ad campaigns directly within the DoubleClick platform.”
But will this deal with DoubleClick become a nightmare for Twitter users? Mashable writes, ” DoubleClick could fill your twitter stream with an alarming number of vaguely contextual but appalling Twitter ads. (I expect to see a lot of reverse mortgage and weight loss companies.)”
Too early to say whether its promoted tweets will be more annoying, but Twitter wants to finish a lot of unsold inventory and ad dollars on the table.
Until now revenues haven’t been a problem for Twitter but the growing user growth concern has. While Twitter tries to pull up its revenues with these latest announcements, concern about user growth still hang in quite low.