Twitter is Profitable For the First Time Ever; Why & What Does It Mean?
If you haven't heard the news yet, Twitter announced that they have had their first quarterly profit since going public in 2013. After a time period of naysayers and whisperings of Twitter "dying," it's stocks skyrocketed after it announced being in the black for Q4 of 2017. Twitter is finally starting to find its footing as a business. But why was it suddenly so profitable? It could be for a couple of reasons:
A Rise in Users
Twitter's user base has grown in both monthly and daily users. Monthly users have seen an increase of 4% over 2017, while daily users grew 12%. And that new set of users were welcomed to expanded character count and a whole new way to communicate on the platform in a less truncated fashion. More users meant more consumers for advertising and in general a more active community.
A Change in Algorithm
Whether you love it or hate it, Twitter changed their algorithm from showing tweets in reverse chronological order to showing what they deem the most "important" tweets first. It also started to show the actions of people a user followed on their feed, what they've liked and tweets from accounts they follow. It allows the user to see more of what their community sees and interacts with outside of just retweets, and that makes Twitter more engaging overall.
A Change in How Advertising Reaches Its Target
Twitter has focused its efforts on advertising that hits in real-time as opposed to just promoted tweets that might pop up anytime, and often feel uninspired or irrelevant. Buzzfeed's AM to DM morning show on Twitter has been an interesting new way of advertising the website and its sponsors to live Twitter users. Twitter has also used its platform to show in-game highlights of NFL games, as well as the first 60 minutes of PGA Tour events, hoping that the audience will then turn to T.V. to watch the rest. It's an interesting relationship being formed with media that is benefitting advertisers in a new way.
What Does It Mean?
Aside from those with Twitter stock jumping up and down in joy, what does it mean? Twitter still faces a lot of problems and has a lot of legwork to do to catch up to any of its competitors (like Facebook & YouTube) when it comes to profit.
But what it does mean is Twitter isn't going anywhere. That inevitable death? They've just bought themselves a couple of years on their life. And if they can keep being innovative and keep growing their user base, the may never become as big as Facebook, but they could just win that fight for advertising dollars over Snapchat.
If you've been thinking about advertising on Twitter, both paid and organically, now is a great time to do it. Need help? Email me at ChristineMelgarejo@gmail.com and lets get started on your Twitter strategy!