Twitter’s poor performance leaves shareholders not very chirpy
By our News Team | 2022
Tougher times in the advertising sector and the chaos of the failed Musk takeover have been blamed for below-par Second Quarter results.
Shareholders and executives at Twitter are not too chirpy following the recent release of the social media platform’s Quarter Two financial statements, which reveal disappointing results and a decline in revenue of US$270-million versus the same period last year.
Market analysts had expected a better performance. However, a slowdown in global advertising spending has been blamed, as well as general uncertainty around the collapsed takeover bid by Elon Musk.
Image by Photo Mix from Pixabay
“As advertising represents around 90% of Twitter’s overall revenue base, that destabilisation has had a significant impact on the company’s bottom line,” the marketing industry news website The Drum reported.
Working to increase audience engagement
Twitter has been working hard to grow the engagement of its existing audience – as opposed to focusing on increasing audience numbers – which would increase its appeal to advertisers. The engagement-growth strategy does appear to be working, although as yet it has not translated into more ad revenue.
“Twitter is now in the unenviable position of convincing advertisers that its ad business is solid, regardless of how its court battle with Musk ends, and its Q2 earnings show that the platform has its work cut it out for it to do that,” Jasmine Enberg, Principal Analyst at research firm Insider Intelligence, is quoted as saying by Reuters news agency.
In another news report, Enberg noted: “One bright spot was engagement. Twitter is a platform that thrives on news and controversy, and there was plenty of that to go around in Q2 … But user growth may not be enough to convince advertisers to spend on Twitter, especially at a time when many advertisers’ budgets are tightened.”
Twitter’s poor Second Quarter financial performance echoes that of Snapchat, the instant-messaging app, which reported last week that advertisers had cut spending on the platform to combat wider economic pressures.