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Twitter and Snap Q1 2019 results: Croud analysis3 min read

3 min read

Yesterday, Tuesday 23rd April 2019, saw both Twitter and Snap release their earnings reports for Q1 2019. And our very own Mazen Hussain, Croud’s Director of Paid Media & Creative, joined the BBC World Business Report programme to dissect the results.

Mazen Hussain of Croud on BBC World Business Report

The results

Both Twitter and Snap reported strong results overall for Q1 2019.

Twitter

In their Q1 2019 shareholder letter, Twitter reported that Q1 revenue stood at $787 million, representing an increase of 18% year on year. This was supported by healthy growth in advertising revenue, which likewise increased by 18% year on year, to $679 million. Alongside this, total ad engagements increased by 23%; whilst cost per engagement fell by 4%.  Ned Segal, Twitter’s CFO, said, “we’ve never been more confident in our strategy and execution and see a great opportunity to grow our audience and deliver even more value for advertisers.”

At the same time, Twitter also took the opportunity to stress the measures they have been taking to “reduce abuse and its effects on Twitter”. Jack Dorsey, Twitter’s CEO, said, “we are reducing the burden on victims and, where possible, taking action before abuse is reported. For example, we are now removing 2.5x more Tweets that share personal information and ~38% of abusive Tweets that are taken down every week are being proactively detected by machine learning models.”

Snap

Snap Inc.’s Q1 2019 earnings press release reported similarly strong uplifts in key metrics, with revenue up by 39% to $320 million (compared with 36% in the previous quarter). Daily active users were also up 2% to 190 million.

Evan Spiegel, CEO of Snap, said, “In the first quarter we delivered strong results across our business with growth in daily active users and revenue. Our new Android application is available to everyone, with promising early results. This month we announced several new products that we believe will drive further engagement and monetization. As we look towards the future, we see many opportunities to increase our investments, and will continue to manage our business for long-term growth.”

Croud’s take

So, what did our Director of Paid Media & Creative, Mazen Hussain, make of the Q1 earnings reports from Snap and Twitter? Here are some of the key points from his BBC interview.

Twitter still has work to do

Despite several recent initiatives – including releasing a machine learning algorithm to cut abusive Tweets before they need to be flagged by users, plus proactively suspending abusive users – Twitter still has a lot to do, particularly to make advertisers more comfortable with the platform. A key step in this is Twitter’s continued investment in video inventory, working with premium content partners, so that advertisers know their ads are being seen in a relevant and appropriate context.

Snap’s move into gaming

Announced at the recent Snap Partner Summit, Snap’s move into gaming is a smart one given the mobile gaming market is now worth in excess of $70bn. The sheer size of the market, combined with Snapchat’s user base of predominantly under-35s, means this represents a massive opportunity for Snap. That being said, Fortnite still dominates the space, so it won’t be an easy market to crack.

Looking at Snap’s audience more generally, they clearly have the reach and scalability to target the younger market. However, this audience doesn’t tend to spend as much, so reaching these people isn’t as profitable as tapping into other segments. Therefore advertisers should largely be focusing on using Snapchat to influence younger consumers’ perception of a brand for when they get older and start spending.

 

If you’d like to find out more about advertising on Twitter and Snapchat, or have a question for Maz, contact us.