Mobile contributes 80% to Twitter’s total ad revenue
In the last article, we discussed about Twitter’s (TWTR) Q1 2014 earnings and that the company managed to increase its revenues by 119% year-over-year to $250 million. However, the most surprising thing that was revealed by the company during the earnings announcement was that as a percentage of revenue, approximately 80% of total ad revenue was generated from mobile devices, up from approximately 60% in the prior year. This shows that mobile is becoming the main driver of Twitter’s revenue and its growth.
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The mobile Internet advertising market shows strong growth
Recently, eMarketer came out with a report underlining the value of a presence in the mobile space. According to the report, global mobile ad spending increased from $8.76 billion in 2012 to $17.96 billion by 2013—an increase of 105%. This is projected to increase by another 75%, to $31.45 billion by 2014, accounting for nearly one-fourth of total digital advertisement spending. This market could continue to show strong growth and reach around the $100 billion mark by 2018.
Despite growth, Twitter still lags behind Google and Facebook
According to the same report, Google (GOOG) and Facebook (FB) accounted for the majority of mobile ad market growth worldwide last year. Google is the leading player in this market, with a share of about 50% in 2013, although its share declined by about 3% from 2012. However, Facebook showed the rapidest growth, with its share increasing from 5.4% in 2012 to 17.5% in 2013. Twitter’s market share increased from 1.5% in 2012 to 2.4% in 2013, while Pandora’s (P) declined from 2.6% to 2.1%, YP’s declined from 2.9% to 2.1%, Millennial Media’s (MM) remained stable at 0.8%, and other companies’ declined from 34.2% to 25.8%.
Twitter also benefits from MoPub integration
In October last year, Twitter acquired MoPub, the company that helps mobile publishers manage their ad inventories. During the earnings call, Twitter mentioned that it has now successfully integrated MoPub into Twitter and that MoPub has now reached over 1 billion Apple (AAPL) iOS and Android users making it one of the largest in-app mobile ad exchange.