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Performance of Twitter in 2Q17: R&D, Ad-Blocking, and Video

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Part 8
Performance of Twitter in 2Q17: R&D, Ad-Blocking, and Video PART 8 OF 15

Despite Disappointing Growth, Twitter Sees an Online Silver Lining

Twitter growth disappointment

Twitter’s (TWTR) 2Q17 report raised more questions than answers as the company’s revenues fell about 5%, and its audience size failed to grow. Twitter’s online advertising industry, audience size, and platform engagement are closely watched metrics as they indicate the company’s ability to attract more advertiser spending on its platform. 

Twitter is competing against Facebook (FB), Snap (SNAP), Yelp (YELP), and Alphabet’s (GOOGL) Google for marketers’ spending budgets.

Despite Disappointing Growth, Twitter Sees an Online Silver Lining

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Online advertising industry outlook

While there are valid reasons for concern following Twitter’s recent stumble in audience and revenue growth, the online advertising industry has bright prospects. According to technology research and advisory firm Technavio, worldwide online ad sales could grow to $251.3 billion by 2021 from $160.0 billion in 2016, as illustrated in the chart above.

Market intelligence firm eMarketer projects that global online ad sales could grow to $335.0 billion by 2020 from $194.6 billion in 2016.

It’s up to Twitter to reinvent itself

These projections imply that there is a significant growth opportunity for Twitter if the company is able to redirect and enhance its capabilities. Even in the face of recent performance disappointments, Twitter has demonstrated that reinventing itself is possible.

For example, the company delivered a pleasant surprise in 1Q17 when it added 9 million new monthly users, which was significantly more than expected. Twitter has also stepped up its efforts to stem subscriber defection and to drive more platform engagement.

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