More than 50% of Twitter’s ad revenue now comes from videos. The company plans to keep their investments in the format as part of their growth strategy.
Just last week, as they called their quarterly earnings, Twitter executives stated new video ad formats and low CPEs as their primary growth efforts. They have made plans to release new video content all through the year.
‘Video now accounts for over half of our ad revenue. It has been this way since recently, but we realize that there is still a lot of monetization opportunity. We plan to foster our ad growth by enhancing the formats we use, making the content we produce more relevant and introducing new ad formats. We are also working on increasing our audience and executing our sales better,’ said the CFO of Twitter, Ned Segal.
According to Twitter’s last SEC filing, the company’s CPE has decreased by 20%. This has made it easier for advertisers who are interested in buying into their ad system. According to Segal, Twitter will ‘need to produce more video content to offset that,’ but the company is already working towards that end, with their ad engagements increasing by 69%.
‘Considering we have high CTR and engagements, we deliver high ROI, and we continue to stabilize CPMs,’ said Segal.
Twitter has worked aggressively to secure rights to sports live videos and videos of other events. Yet, their efforts do not end there. The company is also working to produce new products around live videos.
‘We want to see our product infrastructure strong enough to exceed just live streaming. We want to show what conversations are taking place around the specific events,’ said Jack Dorsey, Twitter’s CEO. He added that the company has also introduced a module to let people know what is happening on their timelines.
‘If we have a live stream, our users will be able to see the event unfold live. You will be able to tap into everything from sporting events to news,’ added Dorsey.
*‘Perhaps more important than that though, is that the user will be able to see what other users are saying about the event. You will even be able to get commentator comments or analysis from industry experts – everything that was important in a Recap tab. We get to show people not just what is happening as it does, but also what was most important in the events they missed.’ *
A buyer will want to know what the place of traditional ads will be on its live streams as opposed to their newer formats. Yet, with Twitter’s most recent earnings, there is no doubt that its future lies in the video.