Shares of Twitter Inc. (NYSE: TWTR) fell 2% on Friday, a day after reporting fourth-quarter 2021 results that missed expectations across the board. The company’s top and bottom numbers as well as its user metrics were all below estimates. Despite this, Twitter remains quite ambitious when it comes to its short-term goals, and its strategy is centered around two key pillars.
Twitter said its goal is to serve public conversation. The selection of content and conversations on its platform plays a huge role in this. Currently there is a lot of interest in general topics like politics, sports, entertainment and music. Expanding features like ticketed spaces, tips, super followings, and communities should help broaden the range of topics covered on Twitter.
The company also partners with media companies, news outlets and sports leagues to provide live and on-demand premium video content. During the fourth quarter, Twitter expanded its content partnership with the NBA and also secured deals with ViacomCBS and Bloomberg Media.
This will give the business more opportunities for monetization through advertising. In the fourth quarter, advertising revenue increased 22% year over year. The total number of ad engagements decreased by 12%, while the cost per engagement increased by 39% year-on-year.
The second part of the strategy is personalization. Twitter has focused on understanding customer interests through machine learning and products like topics to follow. The microblogging site has 14,500 topics available in 11 languages and around 280 million accounts follow at least one topic.
During the fourth quarter, average monetizable daily active use (mDAU) increased 13% year-over-year to 217 million, driven by product enhancements and global news conversations. In the US, mDAU grew 2% year-over-year to 38 million, while internationally it increased 15% to 179 million.
Twitter said it made significant progress in fiscal 2021 against its 2023 goals. During the year, the company added 25 million mDAUs and saw a 25% year-over-year increase in number of people logging into Twitter to create a new account or reactivate an existing account. It also saw a 35% year-over-year increase in daily registrations.
Twitter believes there is a vast opportunity for it to grow its revenue and mDAU and enter the currently $150 billion and growing digital advertising market, where the company holds currently less than 3% market share.
Click here to read the full transcript of Twitter’s Q4 2021 Earnings Conference Call