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

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Part 9
Performance of Twitter in 2Q17: R&D, Ad-Blocking, and Video PART 9 OF 15

How Ad-Blockers Affect Twitter

Ad-funded businesses

Although ad-blockers can be a boon for Internet users, they can be a source of heartburn for online publishers and some large Internet companies. For example, Facebook (FB) and Alphabet’s (GOOGL) Google are taking steps to limit the impact of ad-blocking on their businesses.

Facebook, Google, Yelp (YELP), Snap (SNAP), and Twitter (TWTR) depend on advertising for most of their revenues. In 2Q17, advertising sales comprised more than 85% of Twitter’s total revenues. The chart below illustrates ad-blocker usage in the US by device type.

How Ad-Blockers Affect Twitter

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The rise of ad-blockers

According to PageFair, an anti-ad-blocking firm, about 380 million mobile devices and 236 million desktop computers were using ad-blockers last year. Market intelligence firm eMarketer projects that 27.5% of US Internet users (about 75.1 million people) could deploy ad-blockers this year.

The mobile nature of Twitter limits ad-blocker impact

Considering that Twitter is mainly a mobile app, the impact of ad-blockers on Twitter’s advertising revenues appears limited because ad-blockers tend to be more effective on web browsers. However, mobile users spend less time on browsers compared to apps. In the US, for instance, eMarketer estimates that less than 11% of mobile time is spent on browsers.

Facebook and Google are deploying anti-ad-blocking technologies to protect their revenue streams from desktops. Facebook said its desktop ad revenues increased 17% in 2Q17 as it successfully battled ad-blockers.

Google is developing a native ad-blocker built into its Chrome browser to limit the impact of third-party ad-blockers on its advertising business. The company also hopes its native ad-blocker could improve the ad experience for Internet users.

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