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Time puter > Social Media > More advertisers plan to spend less on Twitter: Mahaney
Social Media

More advertisers plan to spend less on Twitter: Mahaney

Deep
Last updated: 2016/04/06 at 12:08 PM
Deep Published April 6, 2016
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4 Min Read

As if Twitter needed another problem, a recent survey suggests advertisers are souring on the social media platform.

Advertiser interest in Twitter began cresting early last year, but the latest survey by RBC Capital Markets found a significant jump in the number of advertisers who plan to decrease their spending on the website.

According to the survey, 23 percent of Twitter advertisers plan to decrease spending, while 32 percent plan to increase spending.

“There’s a real negative tell in here,” RBC lead Internet analyst Mark Mahaney told CNBC’s “Squawk Alley” on Wednesday. “Just like there are momentum stock buyers, guess what? There are momentum ad buyers, and the momentum is moving away from Twitter.”

In the fourth quarter, Twitter’s advertising revenue rose 48 percent year over year to $641 million, below Wall Street’s expectation of $647.7 million, according to StreetAccount.

Twitter has faced scrutiny from investors as its user numbers stagnate, leaving Wall Street to wonder where future revenue growth will come from. Shares of Twitter are down more than 23 percent year to date.

Twitter monthly average users (MAUs)In millions, not including SMS-only usersQ1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 20150100200300400Twitter

The survey, conducted twice a year, asks about 2,000 advertisers to rank companies by return on investment, or the ability to directly track ad dollars spent on a platform to a purchase of some sort.

The top performers by a wide margin are Google parent Alphabet andFacebook, Mahaney said.

The improvement in return on investment for No. 2-ranked Facebook in the latest survey was nonetheless surprising, Mahaney said. As Facebook’s ad prices increase, RBC has been on the watch for a correction in ROI, but 59 percent of the survey respondents report their ROI on Facebook is growing, he said.

The single largest loser in the migration to the Web is print media, and an increasing percentage of ad spending is being diverted from television budgets.

‹
  • Twitter

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  • The Facebook logo is reflected against source code on the screen of a computer in this photo illustration.

    Facebook: Active advertisers jump to 3million
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About 40 percent of advertisers pointed to money previously allocated to television as a source of funds for Internet advertising, up from 37 percent a year ago and 25 percent a year and a half ago, Mahaney said.

Among the types of companies that focus on Internet advertising are transactions, commerce and travel companies, Mahaney added. Brand advertisers have yet to fully migrate to the Web, he said, but Facebook’s introduction autoplay ads is drawing them to online platforms.

Disclosures: The analyst and his family own shares of Alphabet. RBC owns a greater than 1 percent share of the stock and provides investment banking services to Alphabet. RBC makes a market in the securities of Alphabet, Facebook and Twitter.

[“source-gsmarena”]

TAGGED: advertisers, less, Mahaney, more, on, plan:, spend, to, Twitter

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Deep April 6, 2016
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