San Francisco, California–The cost of advertising on Twitter is getting less expensive, even as the social site’s revenue grows. The inverse relationship seems to suggest that the microblog has yet to find a stable price to attract a loyal group of businesses.
The average cost to advertise on the social media’s desktop and mobile platforms dropped by 18 percent in the last three months of 2013, according to figures disclosed in the company’s annual report. However, the microblog grew its revenue, posting $243 million in the last quarter of 2013, with an astounding $220 million being derived from ads.
Twitter Ads and User Activity
Though ad costs have steadily fallen, which would ordinarily appeal to marketers, the microblog has seen a stall in user growth and activity is declining. Twitter added 9 million more users in the last three months of 2013, but that figure only represents an increase of 4 percent from the third quarter prior. As a result, the company’s stock fell as much as 17 percent, yet it still posted better numbers than experts forecast.
User activity has likewise declined, page refreshes decreased by 7 percent from Q3 to Q4 last year. Its overall user log-in rate has stalled and timeline views have decreased. Since it went public last year, it has yet to turn a profit.
Compared to Facebook, the microblog is outperforming in ad revenue, wringing 75 percent out of mobile marketers opposed to 53 percent. “As we continue to optimize for advertiser value and the overall user experience, the cost per ad engagement may continue to decline over time, and we expect the cost per ad engagement to decline in the near term,” the company explained the phenomenon in a statement.