Twitter ad sales hit by virus crisis but active users soar
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Twitter has pulled its first-quarter revenue outlook and forecast an operating loss as the coronavirus outbreak crimped advertising sales. It is the first major ad-supported US platform to disclose the impact of the virus and investors will now look at how Facebook and Google are coping.
PHOTO: AGENCE FRANCE-PRESSE
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BENGALURU/SAN FRANCISCO • Twitter pulled its first-quarter revenue outlook and forecast an operating loss on Monday as the coronavirus outbreak crimped advertising sales, but said the pandemic boosted the number of active users on the microblogging platform.
The outbreak has made social media services such as Twitter vital for a broader population than usual, as people look to stay abreast of the latest news from the authorities and keep in touch with friends virtually.
But many advertisers have pulled marketing budgets to rein in costs because of the virus-related uncertainty, and others are hesitant to advertise alongside coronavirus discussions for fear of associating their brands with the sensitive topic.
"The Covid-19 impact began in Asia and as it unfolded into a global pandemic, it has impacted Twitter's advertising revenue globally more significantly in the last few weeks," chief financial officer Ned Segal said in a statement.
Twitter is the first major ad-supported United States platform to disclose the impact of the coronavirus and investors will now look at how larger Internet peers Facebook and Alphabet's Google are coping.
Those technology firms have not disclosed any financial impact from the outbreak so far.
"This is not going to be business as usual, and the marketing industry is certainly going to see a real impact. I don't think anyone knows how big. So we're going to watch and look," Facebook chief operating officer Sheryl Sandberg told Bloomberg TV last week.
There are positive signs for the Internet giants, though.
Hyundai, Toyota and General Motors were among carmakers who started to run online advertisements last week that directly or indirectly mentioned how they were adjusting practices because of the coronavirus, according to commercials seen by Reuters.
The warning from Twitter comes two weeks after it reached an agreement with Elliott Management that allowed Mr Jack Dorsey to stay on as chief executive and added three new directors.
As part of the agreement, Twitter pledged to grow daily users by 20 per cent or more this year and beyond, roughly in line with user growth in its fourth quarter.
Twitter said on Monday that total monetisable daily active users jumped 23 per cent to 164 million quarter-to-date, driven by the conversation around Covid-19, as well as ongoing product improvements.
"We're seeing a meaningful increase in people using Twitter," said Mr Dorsey.
The company said it expects first-quarter revenue to be down slightly on a year-on-year basis.
It had earlier estimated revenue to be between US$825 million (S$1.2 billion) and US$885 million, an 8.6 per cent rise from a year earlier at the midpoint.
It is scheduled to announce its results on April 30.
REUTERS
