Twitter’s growth has been aided by video ads
Twitter’s (TWTR) recent revenue growth has been solid. Whereas its monthly active user base growth has been slowing, its daily active user base is growing.
One main contributor to Twitter’s revenue growth has been its video ads, the company’s biggest ad revenue source. According to eMarketer estimates, video ads contributed 55% of Twitter’s total ad revenue, and that number is expected to keep rising. During its fourth-quarter earnings release, the social media giant said video was its fastest-growing ad format.
Video ads are getting more popular in social networks
According to eMarketer estimates, social networks’ US video ad spending will reach $14.89 billion in 2021, growing 44% from this year’s spending. The research company also predicts that Twitter’s US video ad revenue will surpass $1 billion in 2021. In comparison, Snapchat’s (SNAP) US video ad revenue is projected to grow 19.9% year-over-year to $724.4 million in 2021. As video takes over social media with the advent of Facebook’s Stories, Snapchat, and Instagram, marketers are shifting to video ads, which may have more influence on consumer behavior.