Tweet This
The inability for Twitter to make money has definitely changed since its posted four profitable quarters , following Kay Madati, head of content partnerships, coming onboard in the fall of 2017 from Viacom owned BET. His strategy of partnering with pre-existing content providers to build sizable awareness and exposure for things Twitter users care about is paying off.
The Breakdown You Need to Know
Video has become increasingly important to Twitter’s business and CultureBanx reported Madati along with his team have been able to quell concerns over the company’s strong push into video partnerships primarily due to the increase in advertising sales. For the previous four quarters, video has accounted for more than half of its advertising revenue and remains the fastest-growing ad format.
In its most recent quarter the social media platform reported ad revenues surged up 29% to $650 million. This is primarily attributed to ad sales on broadcasts from media companies like Live Nation, Major League Baseball and Major League Soccer. Ultimately, investors were continually looking for proof of concept that video ad revenues would lead to sustainable growth in revenue and profits and now they have it.
Just this past summer Madati adopted a regional management structure rather than the previous one based on categories like news, sports and live video. A more streamlined content strategy enabled the company to broker deals with Will Packer Media, Disney/ESPN and Viacom.
Madati told Variety earlier this year “I know that the media and the narrative around this is either the disrupters or the ones being disrupted, but I actually think the future looks like some version of these two universes.” The publication also notes he suggests the immediacy of Twitter is perfectly astute and ready to be complemented by content providers’ product. Madati sees them as ideal partners rather than competitors. “We are not foes to the television or media industry, we are friends. And we back it up by putting data behind that around how the deals come together, what the opportunity is and how we all can make money together,” he said.
User Growth Mindfulness: Even though Twitter reported a loss of nine million monthly active users for Q3, investors were already warned this hit was coming. They removed accounts used for disinformation, hate speech and other abuse. The micro-blogging platform is attempting to solidify a base of high quality users who would be extremely attractive to advertisers.
Twitter said the number of its daily active users rose by 9% year-on-year, even though this represented its slowest growth rate in two years. It’s important to note that user growth has been a bit lackluster, however they’ve figured out a way to make more money per user than ever before.
Twitter’s video advertising revenue stands to grow more with video ad spending set to total $18 billion in 2018, according to eMarketer. They will need that type of growth to compete against the likes of Facebook and Snapchat. Shares of the company are up 85% in the past year.
