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Twitter Comfortably Beats Q2 Revenue Targets With New Ad Targeting Strategy

Twitter Comfortably Beats Q2 Revenue Targets With New Ad Targeting Strategy
The ad targeting improvements for helping brands to reach potential customers rolled out during the second quarter helped the social media platform Twitter Inc to beat revenue estimates of the Wall Street for the quarter. 
The results pushed Twitter’s shares up by 5 per cent. 
One of the focus areas of Twitter since the beginning of the year has been to roll out products in new areas such as in audio-only chat rooms and newsletter publishing with the aim of turning around a stagnation in growth that it has experienced for years and to achieve its pre stated target of doubling its annual revenues by the end of 2023.
The company reported a massive 87 per cent quarter on quarter growth in advertising revenue which came in at $1.05 billion which comfortably neat estimates of Wall Street of $909.9 million.
The company said on a conference call with analysts that one of the focus areas for Twitter has been to enhance the penetration and effectiveness of advertisements on its platforms as it introduced 2,500 new topic categories during the quarter so that users can find content that they would be interested in and all of these helps to provide more ad targeting data back to Twitter.
"We get great signal about what people are most interested in, where they are or the places they care about," said Twitter Chief Financial Officer Ned Segal during the call.
Twitter said that its revenue was pushed up because of those improvements in addition to a higher demand from advertisers seeking to reach consumers with many economies opening up with the receding of the Covid-19 pandemic and restrictions being eased by authorities.
According to Ygal Arounian, a research analyst at Wedbush Securities, the strong performance from Twitter as well as its tech peer Snap Inc, which also reported a 116. per cent growth in quarterly revenues, shows "that the overall digital ad market is on fire right now, with the reopening further strengthening advertisers' budgets".
For the second quarter ended June 30, there were 206 million monetizable daily active users (mDAU), which denote the number of users who are served advertising, on its platform, Twitter reported which was in line with the targets of analysts of 205.9 million users, according to IBES data from Refinitiv.
Twitter said that a lighter news cycle in the United States resulted in the social media platform’s user base in the country declined by 1 million over the quarter compared to the previous quarter.
The reported total number of users globally was in line with Wall Street targets.
The San Francisco-based company now expects headcount and total costs and expenses to grow at least 30% for the full year, up from its previous guidance of 25%, as it invests in its engineering and product teams.
Bitcoin "is a big part" of Twitter's future, said Chief Executive Jack Dorsey, who is known for a proponent of bitcoin since long, during the earnings call, and added that the digital currency could be used for ecommerce transactions on the platform or to tip popular content creators.

Christopher J. Mitchell

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