Twitter benefits from ad strategy, Yahoo takes a hit

by CXOtoday News Desk    Oct 16, 2013

Twitter tweeting

 

The latest revenue figures released by Twitter show that the company’s revenues have surged to $169 million, more than double in comparison to the same quarter last year. “The advertising revenue numbers suggest that the company’s strategy of cutting advertising prices while offering more targeted ads is paying off handsomely,” says a report published in The New York Times.

According to the report, every time a Twitter user visited the site, conducted a search or refreshed the screen in the third quarter, the social networking company took in an average of 97 cents in advertising revenue, up 49 percent from a year ago.

“The company’s research, conducted in partnership with Datalogix, which tracks offline purchase, shows that Twitter ads do lead directly to sales,” Kevin Weil, Twitter’s vice president of revenue products was quoted as saying. For consumer brands advertising on Twitter, sales rose 8 percent among those who saw the ad, with higher increases from consumers who clicked on the ad or became followers of the brand.

Although online advertising itself as a revenue option is yet to take off in a big way, internet giants like Yahoo, Google, Twitter and Facebook seem to be working out their own advertising strategies to leverage their growing consumer bases.  

However, in the case of Yahoo it appears that the company is not being able to translate this increasing user base into revenues. Yahoo’s Q3 results show that revenues have declined by 5 percent to $1.14 billion in comparison to the previous year. The company’s display advertising business, which accounts for about 40 percent sales, has dipped by 7 percent to $470 million. This could be a result of increasing competition from Google and Facebook in the $17.5 billion United States display advertising market, says a New York Times report.

Yahoo had earlier been a frontrunner in display ads, but has been continuously losing its share for the last few years. This year, its share is expected to fall to 7.7 percent, from 8.6 percent share last year, while Google and Facebook’s share of the market is expected to grow to 17.4 percent and 17 percent, according to eMarketer.