Twitter's advertising business is struggling

Twitter has to digest an unexpectedly high drop in profits in the third quarter due to problems in the advertising business. The US short message service is expecting continued headwinds in the coming months.

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In the months July to September, a net profit of 37 million dollars resulted, as Twitter announced on Thursday. This is significantly less than analysts had expected. In the same period of the previous year, the group had a profit of 789 million dollars. At that time, however, it had benefited from a positive tax effect of a good 680 million dollars.

Sales in the past quarter rose by nine percent to 824 million dollars. But even with this, the Americans failed to meet the expectations of the stock exchange. In pre-market trading on Wall Street, Twitter shares subsequently slumped by around 15 percent.

 

Troubles burden

The short messaging service suffered from a number of issues in the third quarter, including program bugs that affected the company's ability to target ads and share data with advertising partners. In addition, certain personalization and data settings did not work as expected.

Twitter also experienced a seasonal slowdown in its advertising business over the summer. Although measures have been introduced to remedy these problems, they are likely to continue to burden the advertising business in the short term, the group said.

 

More users

Despite the problems, Twitter was able to increase the number of daily users in the third quarter by 17 percent to 145 million within a year. The company only counts users to whom it can show advertisements via its website or apps.

Users who follow tweets via other sites such as Tweetdeck are not included in this figure. Twitter CEO Jack Dorsey attributed the growth to product improvements, such as in the navigation on the Twitter site as well as its usage options.

In the summer, Dorsey had to admit to problems with data security. Data from users without consent was allegedly "inadvertently" used for personalized advertising. (Werbewoche.ch reported). Twitter and other social media platforms have also come under pressure recently over their ad policies.

Democratic presidential candidates in the U.S., including former Vice President Joe Biden, had recently criticized the platforms for allowing ads from politicians that they believed contained false or misleading claims. (SDA)

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