Twitter CFO on How Their Strategy of Increasing ROI for Advertisers is Paying Off

Twitter CFO Ned Segal says that Twitter’s work over the last couple of years designed to improve advertiser ROI and success on the platform is starting to resonate with advertisers....
Twitter CFO on How Their Strategy of Increasing ROI for Advertisers is Paying Off
Written by Rich Ord
  • Twitter CFO Ned Segal says that Twitter’s work over the last couple of years designed to improve advertiser ROI and success on the platform is starting to resonate with advertisers.

    Twitter CFO Ned Segal recently discussed Twitter’s advertising initiatives, how they are dealing with suspicious accounts and how they are working to improve the health of the conversation on the platform in a wide-ranging interview on Bloomberg:

    Twitter Strategy of Increasing ROI for Advertisers is Paying Off

    There are a couple of things at play here and you really have to go back to the strategy we rolled out a couple years ago; to have better ad formats, to drive better relevance for advertisers, to do a better job of measuring their success on Twitter and ultimately to get a better ROI for them on the platform than they were getting before.

    Also, it’s been important to articulate why they should advertise on Twitter. Twitter is the place where you launch something new, Twitter is the place where you go to advertise to the most valuable audience when they are most receptive. We were just not clear about that a couple years ago as we are today and it’s really started to resonate.

    We were pretty surprised at how quickly the business has turned around in the United States. It turned faster than we thought it would this quarter and in a bigger way than we expected it to and that was a big part of what drove the business this quarter.

    More Sophisticated About Suspicious Accounts

    We are challenging a ton more accounts than we used to so that 9 million number is something that Jack Dorsey talked about in front of Congress back in September. We have become more sophisticated in our understanding of how people create spammy and suspicious accounts so that we can detect or prevent their creation or stop them after they’ve been created. How many get through really depends on how many should get through.

    We test far more accounts that are spammy and suspicious and that helps us understand the behavior. Just because an account is created on a web browser in a certain country with a certain IP address doesn’t necessarily mean that it shouldn’t be on the platform as another one might. There’s a lot that goes into it.

    Twitter Prioritizing Safety Above All Else

    We said that MAU (Monthly Average Users) would decline in the mid-seven digit millions in the 4th quarter because of GDPR, our ongoing health work, and decisions we might make around SMS contracts we have with carriers. We don’t forecast MAU out further than a quarter. We’ve done it each of the last two quarters because we could see a decline coming and we wanted to share it with people.

    When we step back and think about our health work more broadly we don’t want to be constrained by the constrained metrics. We want to prioritize health above all else because we know it’s a critical growth factor for the company to make sure that Twitter is a safe place for you and me and for the people who should be on the platform and that removing spammy and suspicious behavior whenever we can.

    Sometimes it affects the disclosed metrics and other times, such as in the 2nd quarter when we removed tens of millions of accounts and they were largely inactive, it doesn’t affect the disclosed metrics as much.

    Still Work To Do to Improve the Health of the Conversation

    We still have work to do to Improve the health of the conversation on Twitter. There are so many ways for us to address these challenges as people get more sophisticated in how they create the bad behavior on Twitter.

    One of the great things about Twitter that we are able to benefit from is because it is public, open, and real-time, we often find things but frequently things are corrected by the platform itself. Other people on Twitter who say ‘that’s not true’ or ‘you may believe that but I believe something different and I want to tell you what I believe.’ The fact that the platform is open really makes a difference and allows us to take a different approach around policies and enforcement than others make.

    Twitter is Public, Open, and Real-Time

    Those are things that allow people to see what a public figure is going to say regardless of their party affiliation, regardless of where they are in the world. They can learn from it, they can respond to it, and they can observe how others might respond to it. We believe that allows for a healthy public conversation, that allows people to have more information than they otherwise might.

    Whether it’s something here in the United States or it’s around the Brazillian or Mexican elections which were just completed, it’s an important part of our purpose to serve a public conversation which means people can see what other people are saying.

    Health of the Conversation is Our Number One Priority

    Health is our number one priority. We think about health, growing audience, improving our revenue product, and sales as our biggest priorities. I don’t expect those to change much as we move into next year and I think because Twitter is public, open, and real-time in nature we are able to leverage those characteristics and still accomplish a lot through our Twitter services team and through the machine learning that we use to amplify our policies and the Twitter services team.

    We have been adding people. We are growing to grow our headcount by about 15 percent this year as we continue to invest against all of our priorities. It’s not against any one priority, but it’s against all of those priorities to be able to grow the business and execute against the opportunities that we see.

    Delivering a Better Twitter During an Election

    We have learned a lot from past elections, whether they are in the United States or in other parts of the world, and we’ve made a bunch of changes which we feel really good about. I will give you two examples. One is where we have the Ad Transparency Center, which is a place you can go on Twitter to see who is advertising around an election what it is that they are saying, to whom they are advertising, and how much they are paying for the impressions that they are getting. This is unprecedented transparency and to us, it’s critical to inform the public conversation.

    Another thing we are doing is sometimes around elections you have people presenting themselves as somebody who they aren’t. Sometimes it’s parody, sometimes it’s very serious. The candidates will now have a stamp so that you know who they are and they really are the person they are presenting themselves to be. We see these as really important parts to delivering a better Twitter during an election.

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