Twitter ad revenue hit by COVID-19

While monetizable users are up 23%, brands are not biting.

Twitter is expecting to incur an operating loss and revenue slip for Q1 2020 as it revealed it has been impacted by reduced advertising spend in light of the COVID-19 pandemic, despite seeing strong user growth.

The social network pulled its Q1 2020 guidance on Monday, as well as its full-year outlook for expenses, stock-based compensation, headcount and capital expenditures, amid economic uncertainty during the coronavirus outbreak. 

Social media use is growing as the public increasingly turns online for information about the virus and for entertainment during home confinement. Twitter's total monetizable daily active users have reached 164 million, up 23% from 134 million in Q1 2019 and up 8% from 152 million in the Q4 2019.

While this would usually come hand-in-hand with growth in advertising spend, brands are taking drastic measures to ensure they are not affiliated with the virus, including cutting back on spend and implementing sweeping keyword blocking.

This has impacted Twitter's advertising revenue globally, CFO Ned Segal revealed on Monday, adding that the impact has been "more significant" in the past few weeks as the virus became a global pandemic.

"We have made solid progress on our consumer and revenue product priorities, and we remain confident in our opportunity and strategy. We hope everyone stays healthy and safe," Segal said in a statement.

Accordingly, it expects Q1 revenue to be down "slightly" year-on-year and to incur a GAAP operating loss, despite reduced expenses resulting from COVID-19 disruption. The company had predicted between $825 million and $885 million for its Q1 revenue. 

Twitter will provide an update on its Q1 earnings call on April 30. 

"Twitter's purpose is to serve the public conversation, and in these trying times our work has never been more critical," said Twitter CEO Jack Dorsey. "We're seeing a meaningful increase in people using Twitter and our teams are demonstrating incredible resilience adapting to this unprecedented environment.

Shares of Twitter fell by more than 2% in after-hours trading following the announcement.

A version of this story first appeared on Campaign Asia-Pacific

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