Twitter says ad tech and product updates will improve direct response advertising

Twitter reported ad revenues grew by 12% year-over-year to $885 million for the fourth quarter of 2019. U.S. ad revenue increased by 21% year-over-year on Thursday. Total revenue, which includes $123 million from data licensing and other sources, increased by 11% year-over-year to $1.01 billion, passing the billion-dollar mark in a quarter for the first time.

Audience growth. Monetizable daily active users (mDAUs) grew 21% year-over-year to 152 million, up 3% from the previous quarter. US mDAUs also grew to 31 million, up 15% year-over-year and 3% from the third quarter of 2019.

“More than half of the 26 million mDAUs we added in 2019 were directly driven our improvements to the core product,” Twitter CEO Jack Dorsey said on the earnings call Thursday morning.

Dorsey also thinksthe product updates that help users follow topics rather than just accounts “will be transformational” for the platform. “Interests represent an entirely new way to use Twitter, and we’ll deliver far richer timelines from onboarding to daily use,” he said.

Fixing ad product bugs. Last quarter, the company said bugs in its Mobile Application Promotion (MAP) product and personalization and data settings attributed to at least a 3 point hit to ad revenue growth. CFO Ned Segal said the impact was “four or more points” in the fourth quarter.

Dorsey said efforts to address the issues are ongoing but that parts of the new ad stack were in place ahead of the Super Bowl. Segal said work on rebuilding the company’s ad server will be complete in the first half of this year.

Refocus on direct response? With the deprecation of TellApart technology in 2017, focus on direct response seemed to have waned, but that appears to be changing. The company is working on an updated mobile application promotion ad format, which Segal said will “not just to help improve an existing ad format for us, that’s important for our current advertisers, but also because this will give us a better path towards more direct response advertising over time.”

The company is also working to improve its mobile ad exchange MoPub. “And one of the ways that MoPub will benefit is, as we continue our work around more direct response-oriented ad formats, starting with MAP, that should benefit MoPub as well,” said Dorsey.

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About The Author

Ginny Marvin

Ginny Marvin was formerly Third Door Media’s Editor-in-Chief, running the day-to-day editorial operations across all publications and overseeing paid media coverage. Ginny Marvin wrote about paid digital advertising and analytics news and trends for Search Engine Land, Marketing Land and MarTech Today. With more than 15 years of marketing experience, Ginny has held both in-house and agency management positions. She can be found on Twitter as @ginnymarvin.