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Twitter’s 2018 Spending Plan: What You Should Know

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Dec. 4 2020, Updated 10:42 a.m. ET

Twitter to shift spending gears

Twitter (TWTR) is going to shift gears in terms of spending this year. While in 2017, the company was focused on driving profit margin improvements, in 2018, driving growth is going to take center stage. So while 2017 was characterized by falling expenses, Twitter’s expenses are likely to be on the rise this year.

Twitter chief executive Jack Dorsey told investors and analysts the following during the company’s 4Q17 earnings call: “We’re investing to make 2018 a year of growth and expect our expenses to more closely align with revenue after a year of significant margin improvement. We’re proud of the steady progress we made in 2017, and we’re confident in our path ahead.”

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Strengthening its sales force

In 2018, Twitter is looking to invest in areas such as strengthening its sales force, driving audience growth and tackling propaganda on its platform. Social media companies such as Twitter, Facebook (FB), and Alphabet’s (GOOGL) Google came under fire last year as they were accused of allowing foreign agents to use their platforms to meddle in American politics ahead of the crucial 2016 presidential election.

Boosting pursuit of ad budgets

Twitter’s investment in its sales force can be understood in the context of the company boosting its pursuit of advertising dollars. As we can see in the chart above, Twitter recorded the slowest growth in advertising revenues in 4Q17 among its online advertising peers such as Facebook, Snap (SNAP), and Yelp (YELP). Snap’s advertising revenues jumped 74% YoY in 4Q17, compared with the 1.0% YoY increase in advertising revenues at Twitter during the same quarter.

Continue to the next part of this series for a look at Twitter’s advertising business in 4Q17.

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