Twitter Avoids Revenue Hit From Apple Privacy Changes on Advertising

Most of Twitter’s advertisers do not rely on highly targeted ads.

By Reuters | Updated: 27 October 2021 11:18 IST

Investors had expected Twitter would be relatively shielded from being hurt by the changes

Highlights

Twitter is introducing more features like topics
Twitter said monetisable daily active users was 211 million during Q3
Twitter previously announced it would sell MoPub

Twitter on Tuesday reported its quarterly revenue grew 37 percent and avoided the brunt of Apple privacy changes on advertising that hobbled its rivals, sending its shares up 3 percent. The social networking site has been working to add new features such as audio chat rooms to attract users, and also rolled out improvements to its advertising capabilities to reach its goal of doubling annual revenue by 2023.

Advertising revenue was $1.14 billion (roughly Rs. 8,550 crore) during the quarter ended September 30, in line with consensus estimates.

The company said it saw a "modest" impact to advertisement revenue due to privacy changes Apple rolled out, which prevent advertisers from tracking users on their devices without their consent.

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

Investors had expected Twitter would be relatively shielded from being hurt by the changes, because most of its advertisers do not rely on highly targeted ads.

As the San Francisco-based company works to expand its targeted advertising business, it is introducing more features like topics that users can follow on Twitter. Those features provide data on people's interests that can eventually be used to help deliver relevant ads, said Twitter Chief Financial Officer Ned Segal, during a conference call with analysts.

"A lot of this is opportunity that's in front of us," he said.

Twitter May Soon Let Users Flaunt Their NFT Holdings: Here’s How

Twitter's tech peers Snap and Facebook said the Apple changes hurt their ability to target and measure digital advertisements, citing the updates as the reason why the companies fell short of revenue expectations.

Twitter said monetisable daily active users, its term for users who are served advertisements, was 211 million during the third quarter, missing analyst estimates of 212.6 million, according to IBES data from Refinitiv.

While Twitter increased its number of users outside the United States by 5 million from the previous quarter, its US base remained flat.

Total revenue, which also includes money that Twitter earns from data licensing, was $1.28 billion (roughly Rs. 9,595 crore), also in line with Wall Street targets.

Twitter said its costs this year from hiring and investing in a new data centre will flow into next year, resulting in a mid-20 percent increase in total costs for 2022.

The company forecast fourth quarter revenue between $1.5 billion (roughly Rs. 11,245 crore) to $1.6 billion (roughly Rs. 12,000 crore).

Twitter previously announced it would sell its advertising technology unit MoPub, and the deal is expected to close in the first quarter of 2022.

The company said it does not expect to be able to recoup the revenue loss next year from selling MoPub, estimated between $200 million (roughly Rs. 1,500 crore) to $250 million (roughly Rs. 1,875 crore), though it added the sale does not affect Twitter's goal of doubling annual revenue by 2023.

What's most interesting about Apple's new MacBook Pros, M1 Pro and M1 Max silicon, AirPods (3rd Generation), and Apple Music Voice plan? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.