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Who’s winning the war for growth – Twitter or LinkedIn?

Both Twitter and LinkedIn posted Q4 2013 earnings results this week, and both saw sharp declines in their stock price. But what other comparisons can be made from the usage data they made available?

User numbers

Although the two firms use different methods of calculating active users (Twitter has its own Monthly Active Users metric, whilst LinkedIn relies on its own membership data and Comscore measurement), a comparison can easily be made.

Users

Much has been made of Twitter’s slowing growth, but LinkedIn’s growth has slowed even further (a mere 1.6% increase on Q3 2013, which actually showed a sharp decline).

Winner: Twitter

Activity

Again, both companies use different measures of activity. Twitter has its nebulous ‘timeline views’ whereas LinkedIn relies on Comscore’s calculation of page views.

Views

This would account for the marked discrepancy in the absolute numbers seen above, so it is better to look at the growth/decline over the last quarter. Here we see that whilst both platforms have declined, it is actually LinkedIn that has dropped the most:

  • Twitter: Timeline views down 6.9% quarter-on-quarter and up 26.5% year-on-year
  • LinkedIn: Page views down 8.2% quarter-on-quarter and up 9.8% year-on-year

It’s also worth looking at these absolute activity number relative to the user base.

Views per User

Again, a direct comparison between the numbers themselves is not helpful, because of the methods each platform uses to track activity. The trend is interesting though:

  • Twitter saw a 10.5% decline quarter-on-quarter (3.5% down year-on-year) in timeline views per active user
  • LinkedIn saw a 9.6% decline quarter-on-quarter (9.2% down year-on-year) in page views per unique visitor
  • Over the full year, timeline views per active user on Twitter actually increased by 11.8% whereas page views per unique visitor for LinkedIn saw a massive 24.9% drop

Winner: Twitter

Revenue

From the data above, it seems odd that Twitter’s stock price fell by a quarter following its results, whereas LinkedIn’s fell by only (!) 15 per cent. Looking at revenue trends might help.

Revenue

LinkedIn is the clear winner when it comes to net revenue, out-gunning Twitter by a factor of almost two. But Twitter is beginning to close the gap; its net revenues are up 117% year-on-year compared to LinkedIn’s 47.3% growth compared to the same quarter in 2012.

Revenue per user shows the same story.

Revenue by User

In Q4 2013 LinkedIn brought in $2.39 of net revenue per user/visitor compared to Twitter’s $1.01. But yet again, it is Twitter that is seeing the fastest growth in this area, putting on 38.4% quarter-on-quarter (66.5% year-on-year) compared to LinkedIn’s 12% quarter-on-quarter (21.8% year-on-year).

Winner: TBA

So whose stock would you buy?

Twitter’s quarterly results: what marketers really need to know

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There’s been a lot of negative coverage this morning regarding Twitter’s latest financial results. The focus has been on the poor profit figures (the company posted a net loss for the full year of $645 million against revenues of $665 million), but what numbers did the social network reveal that might be of interest to those brands using it to engage consumers and customers?

Usage

Investors have reacted badly to the news that – in the US – monthly active users (MAUs) only grew by one million (1.9%) in the last quarter of 2013.

MAU

What marketers need to know:

  • MAUs outside the US grew by 8 million in Q4 2013, an increase of 4.5% over the previous quarter
  • Year-on-year growth in the US was 20%, bringing the number of monthly active users to 54 million
  • Outside the US, MAUs grew year-on-year by over a third – up to 187 million from 140 million in Q4 2012
  • CONCLUSION: The usage numbers in the US might be stalling but growth outside the US shows no sign of letting up

Advertising

Although profits are down Twitter’s full year revenue is up $665, an increase of 110% year-on-year.

Advertising

What marketers need to know:

  • Around 90% of Twitter’s revenues come from advertising, and these rose by $67m (over 40%) in the last quarter of 2013 alone
  • Full year advertising revenues increased by 120% to $594m from (just) $270m in 2012
  • Average advertising revenue earned per 1,000 timeline views (how Twitter measures user engagement) stood at $3.80 in the US and just $0.60 outside the US in Q4 2013 – but the latter rose by 140% year-on-year
  • CONCLUSION: Twitter is still a ripe advertising channel and marketers outside the US should start familiarising themselves with its products and services

Engagement

This area, I suspect, is the one most troubling Twitter and its investors. It should also be a cause for concern to marketers.

Engagement

What marketers need to know:

  • The absolute number of timeline views decreased across the board in Q4 2013, down by 11 billion to 148 billion worldwide, although still up from the same quarter in the previous year
  • Worse still given the growth in monthly active users, the number of timeline views each user makes dropped by 10% worldwide from Q3–Q4 2013 (a bigger slump internationally than in the US), with an average user making 613 timeline views over the quarter compared to 635 the previous year
  • Whichever way you look at the data, user engagement is down: quarter-on-quarter; year-on-year; full year-on-full year; and both in the US and internationally
  • CONCLUSION: If user engagement continues to fall, marketers will need to work even harder to reach and engage consumers and customers that are themselves interacting less

You can download a PDF of Twitter’s earnings presentation from their website. A Microsoft Excel spreadsheet containing the data behind my analysis is available for download from this site.