Community: Twitter

In Twitter’s financial reporting, the company separates its revenue into two categories: Advertising Services, and Data Licensing and Other.

  • Advertising Services: Advertising makes up about $562.0 million, or about 82%, of Twitter’s revenue as of 2020. Twitter generates most of its advertising revenue by selling promoted products, including promoted tweets, promoted accounts, and promoted trends, to advertisers. The company creates tailored advertising opportunities by using an algorithm to make sure promoted products make it into the right users’ timelines, “Who to Follow” lists or at the top of the list of trending topics for an entire day in a particular country or globally. Promoted trends cost as much as $200,000 per day. Promoted tweets cost between 50 cents and $2 per engagement, while promoted accounts cost between $2.50 and $4 for every new follower.

Advertisers also have the option of paying for in-stream video ads delivered to a targeted audience or sponsoring video content from publishing partners. While the majority of revenue from advertising services is generated through Twitter’s owned and operated platform, a small portion of the advertising products Twitter sells are also placed on third-party publishers’ websites, applications and other offerings.

  • Data Licensing and Other: Nearly 18% of Twitter’s revenue in 2020, or $121.4 million, was from data licensing and other sources. Twitter also sells subscriptions to public data beyond its public API to companies and developers looking to access, search and analyze historical and real-time data on the platform. These companies that get the data usually use it for analysis on what’s trendy, predictions in trends, relevant news, and even in some cases for trading purposes.

The purpose of selling this data to companies so they can turn it into some kind of actionable data, and that is why they are willing to pay a lot of money for it. That is the reason why this type of revenue has been increasing over time.

 

  • The other sources includes service fees Twitter collects from users of its mobile ad exchange, MoPub. This is a marketplace where buyers and sellers purchase and sell advertising inventory.