Twitter’s growth increasingly comes from international markets
In the prior parts of this series, we’ve discussed Twitter’s (TWTR) key growth drivers—user engagement, unique visitors, and mobile traffic. Here, we’ll talk about international markets for Twitter. These markets take on increasing significance with every quarter.
As the chart below shows, Twitter’s revenue from international markets has increased from 26% in Q4 2013 to 33% in Q2 2014. International markets are becoming important for all social networks, including Facebook (FB), LinkedIn (LNKD), and Yelp (YELP), as the U.S. market faces saturation.
Strong advertiser demand around the World Cup
Twitter’s revenues from international markets in Q2 2014 increased 164% year-over-year. This strong growth in international markets was driven by the FIFA World Cup, which produced high user engagement levels, as Twitter provided a tailored user experience for each match.
According to Twitter, “Our promoted products continue to deliver high levels of engagement and marketers are increasing budget and spending in response to the ROI that they are seeing on our platform.”
Engagement levels in the U.S. declined in the last quarter
Twitter observed that Timeline views per monthly active users in U.S. markets declined sequentially. This metric is equivalent to page views per user in the online advertising world. It helps calculate user engagement levels. One of the reasons for this decline was that U.S. markets benefited from big events like the SuperBowl and the Oscars in the first quarter. These events made comparisons difficult with only the World Cup as the main event in the second quarter.
More importantly, Twitter said that U.S. markets are mature markets, while international markets—especially emerging markets—have high growth potential.
If Twitter continues to tap the growth potential of international markets, it will benefit exchange-traded funds or ETFs like the Renaissance IPO ETF (IPO), which has significant exposure to Twitter.