New video formats, better targeting and improved relevancy: Thanks to an attention to video advertising, Twitter’s fortunes are turning around.
Twitter announced its Q1 2018 earnings yesterday, and for once the little blue bird is flying high. The company generated $575 million in advertising revenue during the quarter and, in a surprise, announced that over half that came from video ads.
The company makes money from in-stream pre-roll and mid-roll ads, as well as FirstView, Video Website Cards, and Video App Cards. Video was the company’s fastest growing ad format in Q1. In a letter to shareholders, the company said value for advertisers increased thanks to better ad engagement, more attractive product features, and improved ad relevance. Click-through rates (CTR) were up thanks to more engaging video offerings such as Video Website Cards and Video App Cards.
Live video has been huge for Twitter, which depends on being part of the immediate conversation. “As we continue to expand our differentiated experience around events, video remains an important component of the experience on Twitter, allowing people to post relevant live broadcasts or video clips, advertisers to use In-Stream Video Ads to reach their customers on Twitter at highly relevant moments, and content owners to extend their reach on Twitter,” the shareholder letter says. “The combination of video and conversation is core to our differentiated selection, speed, and personalization.”
Twitter signed over 30 live-streaming, highlight, and video on-demand partnerships in Q1, including a FIFA World Cup deal with Fox Sports and an agreement with MLB for live games and highlights.
Half of the company’s ad revenue ($288 million) came from the U.S., while half ($287 million) came from other countries. That $575 million figure showed a 21 percent gain from the year before. However, international sales were really booming, up 52 percent from the year before.
Total revenue for the quarter was $665 million, which was also a 21 percent increase from Q1 2017. That figure was almost evenly split between U.S. and international markets. Daily active users (DAU) grew by 10 percent year-over-year, while total ad engagements increased 69 percent.
Going forward, Twitter plans to do more to tap demand for online video ads and introduce new ways to buy ads on the platform.