5 Things Marketers Need To Know From Twitter’s Earnings Call
Changes in direct response ad measurement slowed revenue growth, but are improving ROI, Twitter execs say. Google search integration coming in May; tweets in Apple Spotlight search already here.
Twitter had a tough day on the earnings beat Tuesday. Not only were the company’s first quarter financial results disappointing, they were released prematurely — before the market closed — a glitch that might have exacerbated the 18% plunge Twitter shares took in late trading on the New York Stock Exchange.
But beyond the headlines of leaked results and below-expectations revenue, a fair bit of interesting news emerged during the investors call with Twitter CEO Dick Costolo and CFO Anthony Noto.
Here are some of the biggest takeaways for marketers:
1) Lower Click-Through Rates On Higher-Quality Ads
Twitter said it is sacrificing short term revenue in an effort to improve the quality of ads. That’s playing out because Twitter has changed how it charges advertisers for direct response ads. Starting in August, Twitter started offering the ability to pay for specific types of engagement — clicks, conversions or app installs for instance — instead of being charged for overall engagement.
Called objective-based campaigns, the new ad unit is generating lower-click through rates and therefore costing advertisers less, an outcome that hurts Twitter’s ad revenue but improves ROI for advertisers, Noto said.
“We’ve improved the quality of leads for direct response advertising using our website cards by raising the bar on what constitutes an engagement or click,” he said. “The higher bar significantly increases value to advertisers because we are delivering users further down the marketing funnel.”
Twitter’s partnership with Google’s DoubleClick ad platform and acquisition of retail focused marketing technology firm TellApart, both announced Tuesday, is further evidence of Twitter’s emphasis on direct response advertising.
Brand advertising still makes up more than 50% of Twitter’s total ad revenue, Noto said, but the direct response business is growing faster. And SMBs, many of whom favor direct response, make up the fastest growing advertising channel.
2) Coming In May: Twitter’s Full Index On Google
Costolo said that Twitter’s search integration with Google will be launched in May. He didn’t have a specific date or provide more details about how Twitter content would be displayed in Google search results. The motive for rekindling Twitter’s relationship with the search giant is obvious: Twitter hopes to expose more people to its content.
“There’s absolutely an opportunity to go monetize that attention and traffic,” Costolo said. “We want to make sure we iterate on the experiences to get them right first.”
3) Did You Know? Twitter Is Also On Apple’s Spotlight Search
Along similar lines, Costolo also said that Twitter is working with Apple to feed Twitter content into Spotlight search on iOS and OS X. Interestingly, Twitter content is already accessible in Spotlight search, as BuzzFeed points out in a story today. Searching for hashtags with Spotlight (Cmd + Space Bar in OS X and swipe down on the home screen in iOS) pulls up a tweet or two and searching for a Twitter user name takes you to that Twitter profile.
It’s unclear whether Costolo was signaling that Twitter is working to further integrate content into Spotlight or just pointing out a feature that not many people know about. We’ve emailed Twitter for more details.
4) Improved Analytics In The Pipeline
Costolo said that the company is working on extending Twitter analytics to measure reach to audiences off Twitter, both to people who aren’t logged in and syndicated audiences.
“Once we have those integrated capabilities,” he said, “we’ll be able to highlight those to publishers and Twitter users. And I think that will give people a better sense of their own total distribution across the entire ecosystem and I’m excited to get those wrapped up and launched.”
5) Bullish On Twitter Video
Costolo spent a large portion of his prepared remarks touting Twitter video. He singled out Periscope, the live streaming platform that Twitter acquired during the quarter. Periscope, which is battling Meerkat for live streaming market share, had 1 million people sign into the app in the first 10 days after launch, Costolo said. With mobile video uploading, which Twitter added in January, Vine, Twitter’s six-second video platform, and Periscope, Twitter has a full stable of ways to produce one of the most popular types of content.
“We now have a suite of mobile apps, including two of the most powerful native mobile video apps and are well positioned as more and more people turn to video as a way to express themselves, share what’s happening around them, connect with others and view content they enjoy,” Costolo said. “From casual users to content creators who are building a career through mobile video, we will deliver products and services that fit their needs and a public platform that can help them build an audience and reach more people.”
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