You know the Twitter earnings narrative by now. Enthusiasm around strong revenue from advertising products is dampened by concerns over the growth rate of monthly active users (MAUs).
Such was the case with the company’s Q4 Thursday, in which Twitter’s ad revenue doubled from the previous year to $432 million, beating Wall Street estimates. Mobile constituted 88% of ad revenue. Read the release.
But MAU growth rate has consistently rained on Twitter’s revenue parade. Between Q3 and Q4 2014, Twitter went from 284 million to 288 million total MAUs. The additional 4 million MAUs were international (a total of 225 million), while US Q4 MAUs stagnated at 63 million – the same number as in Q3 (Twitter blamed an iOS 8 bug).
So it’s no surprise that CEO Dick Costolo continued to discuss Twitter’s plan to engage logged-out users – people who might view an individual tweet, for instance, without ever signing in.
Certainly Twitter’s latest campaign in this crusade – a Google partnership, announced yesterday, to make tweets searchable – excited analysts, even though Costolo said the capability “won’t launch for several months.”
"By syndicating ads the same way we can syndicate tweets, the audience we can reach extends beyond owned and operated, and it has the same rich data and targeting, and ultimately, the same measurement,” said Costolo.
Costolo outlined Twitter’s other efforts to increase engagement among logged-in and logged-out users, including a partnership in which Promoted Tweets will show up on Yahoo Japan and Flipboard, and a homepage with a mix of algorithm-delivered and curated content. Users that sign up for Twitter after visiting that specialized homepage will get an "instant timeline" without having to choose which Twitter users to follow – which Costolo claimed scared away some prospective users.
In other news, this is the last earnings call when Twitter will report Timeline views (in previous earnings calls, analysts had harped about declines in this area). Twitter had stated in the past that product developments – like a list that curates the best tweets - impacted Timeline views. CFO Anthony Noto reiterated this stance, adding that Twitter will consequently no longer report Timeline views during earnings calls.
At its curtain call, Timeline views rose to 182 million for the quarter, up 20% and ad revenue per thousand Timeline views increased 60% to $2.37 thanks to higher pricing.
Twitter also has room to host more ads, and it plans to eventually have a 5% ad load. However, Noto added: "We have excess supply compared to the demand.”
Despite excess supply, advertisers are still paying more for ads, due to a shift to higher-priced, higher-performing ad units, like promoted video (which is still in beta). Noto said some price increases come from higher-priced ads with lower CTR, like app install ads. Cost-per-engagement ad pricing increased 10% from Q3 to Q4.