Q2 2021 Twitter Inc Earnings Call
We intend to build an ecosystem of connected features and services focused on serving 3 core jobs.
News, which is what's happening.
Discussion and conversation in helping people get paid.
Every single person on the World has some need for at least the per SKU and pre funding the third.
Building a model like this isn't easier fast, it's deliberate net ensures resilience and ever increasing global value.
There are 3 trends, while relevance of Twitter and you our shareholders.
Hi.
Centralization.
And the Internet finally, having access to a global native currency in bitcoin.
All these will help our dealer jobs, better and we intend to lead the way in age.
With AI and machine learning, we increased relevance and discovery a longstanding issue on Twitter, which we're improving every day from sign up to and ask questions.
The decentralization, we increased the size of the corpus of conversation, we have access to an improved conversational health by giving more people more power to individuals.
And with the global currency.
Sure people people and companies can freely trade goods and services anywhere on the planet.
Ecosystem model will enable an experience or an individual or a company of any size can treat.
<unk> moved to non audio channel build a following right newsletter charged for content and eventually solid service a good all in 1 simple flow.
Each part of the cycle, we're positively reinforce other parts and build upon itself.
Inventory elsewhere and will work even more for Twitter.
Along the way, we're going to try things that end up not being a bit or it can be faster recognizes can take action without hesitation as we did with fleets.
They are better solutions to the problem, we're trying to solve for the stories format everyone has adopted.
Entirely new formats that are unique to Twitter and our model.
This is where we're starting to create <unk>.
<unk> to start and stop many more features than we have in the past.
That's all from me for now on to Thank you all for your continued trust and belief as we do our work on that.
Thanks, Jack before we get into Q&A I'll cover a few topics as Jack noted Q2 was a strong quarter, particularly for advertising, we exited march with momentum across both brand and Dr. And April trends continued to improve with ongoing strength throughout the quarter across all major products and geographies.
Our growing audience that our AD products strong sales execution global events and advertiser product launches all had a big impact on our performance as a result, we exceeded the high end of our guidance range by 10% or approximately $110 million in our guidance, we equally weighted to slower start to the year that we saw on January and February and brand.
With a strong return to brand spend that we saw in March which was in hindsight too conservative.
The impact of ATT on the second quarter was also more muted than we expected, although it's too early to assess the long term impact.
And <unk> grew 11% year over year on 3% quarter on quarter inline with historical seasonal trends and the outlook we provided in April.
Within our global <unk> growth of 11% our sequential growth in the U S may get some attention here.
Here's some context in the 3 years prior to Covid reported quarter over quarter growth for U S. <unk> in the second quarter has ranged from $1 million.
Up to $1 million down so our performance. This year is relatively consistent with the historical range. Despite an atypical backdrop, which includes by their new cycles in the U S as well as the beginning of reopening across many communities where consumer behavior likely is not yet normalized.
While it's too early to tell how people's behavior may change as some economies reopen while others are still struggling I would remind you that sequential growth for U S. MCA you on Q3 over the last 4 years has ranged from flat to up $1 million, suggesting Usn day, you could be flat on a sequential basis in Q3 of 21 net.
Good news is that we're confident in our ability to accelerate growth longer term and in the near term. These same trends have been great for advertisers with a return to global events product launches and our better AD products, all driving improved advertiser ROI and our ability to deliver strong results.
And there are no changes to our thinking about MDA you over the course of the year. We continue to expect low double digit year over year growth in Q3, and Q4 with a low point likely now behind us.
Given the momentum we're seeing as we enter the second half of the year, we're updating our thinking on investment and revenue.
Our expectations for 25% or more expense growth in 2021 and revenue growing faster than expenses now appears to loans.
We are accelerating our investments and now expect the head count along with total costs and expenses to grow 30% or more for the full year, but our focus on engineering and product as you would expect incremental head count investments in 2021 will flow into our annual expense based on 2022.
With regard to revenue we continue to expect total revenue to grow faster than expenses in 2021, assuming the global pandemic continues to improve and that we continue to see modest impacts on the rollout of changes associated with iOS protein Delphi.
You also may have noticed on our shareholder letter that we purchased $334 million of Twitter shares in Q2 a.
A little more than twice the amount we repurchased in Q1, reflecting the pullback in share price. We saw in early May we will continue to be thoughtful and nimble as we move forward likely varying our pace based on the operating environment, our capital needs and market conditions. In summary, we're pleased with our results and the momentum we see as we enter the second half of the year.
And with that we're ready to take your questions operator.
Thank you ladies and gentlemen, if you have a question at this time please.
Cy 1.1 on your Touchtone telephone.
So your question has been on our units day movie I saw from <expletive> can you. Please pass.
On the Thompson.
Our first question comes from Ross Sandler with Barclays. Your line is now open.
Hey, guys. Thanks for taking the question.
You had a leadership change in the sales organization recently resumed.
Anything that we should expect from that group in EBIT increased focus on new areas. Obviously, a lot of momentum in your AD sales business right now so any color there would be helpful and then.
Just a little more follow up on the on the USDA U.
With all the product innovation going on right now, we're a little surprised to see the declines so was that just kind of COVID-19 burn off impact or any other color you can give us on retention on that line. Thanks, a lot price.
Sure.
So on the on the first part of your question Marcos Mozzarella Chris.
Moving us after 9 years as hotels.
It is incredible to recruiting leadership function and Sarah.
We are a core competence.
<unk> ability to continue to push that team also has amazing collaboration.
With our head of revenue products Bruce.
And that's really what we're looking for so no specific changes there who are moving from.
On some of them are really strong for some of them even stronger.
And really excited about where Sarah will bring to our leadership team.
Net.
Hey on the second part of your question Ross. So 1 I just point you to the typical seasonal trends that we've seen when you look past.
Covid or when you look before Covid. We're in 17, 18, and 19, we were somewhere between down $1 million to up $1 million or flat in the reported numbers. So it is still consistent with that when you take that in the context of a slower new cycle in the U S and people coming out of shelter in place in many communities in the U S.
And keep in mind that they likely have normalized their habits.
Those who for whom Twitter is a new part of their daily ritual and those who are already.
Twitter faithful.
Active people beforehand, I think it's too early to call exactly how it all plays out from here, but when we look at all the product work that we're doing to make it easier for people to find what they're looking for adding 2500 topics this quarter, including topics in the on boarding flow.
Giving people more control over who can respond to them.
Other initiatives such as those we feel really good about our ability to hit that $315 million <unk> number that we put out for the end of 2023 and to change the trajectory of the curve in between here and there.
Great. Thanks, a lot guys.
Your next question comes from Doug Anmuth of Jpmorgan. Your line is now open.
Thanks for taking the question 1 for Jack and 1 for Ned Jack can you just talk more about how you see bitcoin, becoming more deeply integrated into Twitter, particularly around some of the new newer products like superpowers space.
Spaces, and how that can drive both engagement and monetization for Twitter overtime, and then Ned just hoping you could talk more about your map and other GR AD product changes and how those are resonating with Dr. Advertisers I know it was a strong brand quarter. So it's probably early on moving that.
Mix, but are you seeing an increase or inflection in scale, the advertiser base and any commentary around <unk>.
<unk> revenue you talked about acceleration over the last couple of quarters.
Yeah.
So obviously you've been.
Greeting and talking a lot about the crimson on whether it's important.
I'll explain a little bit more as to why.
In my opening remarks.
I think.
Non.
Focusing on the on the on use cases.
Net of currency and the cash.
On probably the best share in order to be the best candidate.
Core that role.
That's what I think we should really focus on as.
<unk> global currency.
We are able to move so much faster.
Alex such as Super follows Commerce.
Subscription tip jar.
We can reach every single person on the planet because of that and sort of going down on market by market by market approach.
I think this is a big part of our future.
I think there is a lot of innovation about just currency to be especially as we think about decentralising social media more and providing more economic incentive. So I think it's hugely important to Twitter and Twitter shareholders.
We.
New to look at this space and invest aggressively aggressively in it and we're not alone here.
Chris Lucas tried to do with the.
Libre or <unk>.
I'm not sure what they are calling on right now, but there is an obvious.
Need for this and appreciation for it and I think in.
An open standard.
That's made a standard is the right way to go which is.
While my focus on our focus will be on a.
A good point, so I do think it allows speed and allows a lot more innovation.
And it really opens up entirely new use cases for political in nature.
Net.
Hey, Doug on the second part of your question a couple of things 1 when we think about an inflection point in terms of the number of advertisers on Twitter that's in front of us.
Work, we're doing in SMB, which had another strong quarter. So far has been to help grow the.
The spend from the existing customers, while we put a pilot out for business profiles back in April, which so far is going well, but more work to do there and while we continue to make it easier for small businesses with a new version of quick promote to buy ads on Twitter and to help them understand the value proposition of doing so.
In terms of map.
Feel really good about our progress there with our revamped product out in February we began to see some strong momentum there and that momentum continued into Q2 I'll give you a couple of fun facts.
The streamers.
But as they continue to grow their business and launched new shows and get people interested in their services. They grew their spend over 40% sequentially with Twitter in Q2.
We are piloting a playable AD format for gamers. So that you can play a game inside of an AD.
We have multi destination care ourselves inside of map. So you can send people to different.
Different places these are great. Examples of some of the innovation when you add those up with better age based better location based targeting and the ability to show map ads to those folks who had limit AD tracking on before where we Couldnt report on them earlier, but now we can as a part of U S. GAAP network. We've made really good progress here and feel like we've got the wind at our backs.
On map going into the second half.
Great. Thank you both.
Your next question.
It comes from Rich Greenfield like Chad Your line is now open.
Hi, I wanted to follow up net on that last question that you were just sort of talking about local.
In the press release I.
I guess on the Investor letter, there's like a 175000 cities comment on them. It seems like you called that out for a reason in terms of your ability to target I think to your point I think we're very focused on sort of how you expand local advertising.
What was being done before.
How many cities like what does that comment can you put it into context and I'm curious.
If there's other things that you can look at that sort of tied to that in terms of like other things on the AD product side that youre doing or about to do that are starting to really make local advertising more appealing and then just a big picture question for Jack we're seeing a lot more topics on topic suggestions and it seems like youre getting increasingly.
Specific with your topics that you're offering up could you just maybe give us a sense of sort of what youre learning on how youre adjusting I know.
<unk>, leading bitcoin aside I think topics has been 1 of the biggest things you've been focused on over the last couple of years.
Sorry.
And net.
Sorry, I'll start on the first part of your question Rich, we felt like we got really unique and differentiated signal and how people are using our service.
On May follow 1 of the 9500 topics, we've got 2500 more topics this quarter.
As we get from 9500 too many many more topics, we get great signal about what people are most interested in where they are are the places they care about that might not even be where they are today leveraging that signal for small businesses to find their customers. Both of those are small businesses.
<unk> have a distributed customer base are those that are local to a specific market. We think can really help us help small businesses find their customers in a differentiated way. So the cities I think that plays out for topics overtime. It plays out right now in terms of how we can help on advertiser target their customers.
Or people who are in a given location we've made improvements to our age based targeting as well. These are things that help large advertisers as well as the smallest advertisers I know when you look at why you see an AD and you see that it's either because youre on a state or in a country or a certain age, we're getting better and better at helping advertisers find there.
Customers. This way and this quarter is an example of some of the impact that we're seeing from that.
And on the on what were learning from topics we continue to.
Understand how important it is to our service both sign ups and also within the App experience.
And how greater foundation for everything that we do.
Including newer things like spaces.
Very very tightly focused on as we dig into conversations even more.
Usually those spaces are focused on 1 particular topic, but sometimes they break into money.
And being able to understand how.
How that is and also Chris snippets of the conversation allows for more content.
Around those interests on people.
Hopefully get more on more and more value, we continue to add more topics more languages.
But I think the important work to look forward to.
<unk> is how we use this as a foundation.
Move away from just purely a broadcast Mike there's in some more of a narrow casting.
1 of them where people can not only.
A very specific view on that topic, then interest under the world, but also participate in a real net feels much smaller than speaking to the whole world, which is 1 of the reasons. So are you talking about spaces on you're talking about.
Are you talking specifically, we would say narrow or you're talking more broadly.
More broadly.
More broadly and then narrowing.
Narrow casting a use case that we want to solve.
And spaces as 1 example would be that the spaces can also be used for broadcast Michael.
Rich remember back to the analyst day, where we talked about communities.
And over time, the ability for people to tweet directly to a community as an example think about an advertiser leveraging that community. There's a guy at Twitter tweets about cookies, a lot and some people may not be interested to know.
Chris.
Some people may not be interested in those fees just because he is the CFO of Twitter it'd be cool if he could lead to the cookie community and spare the rest of U S.
As cookie tweets and there'd be a target rich environment for people, who wanted to buy chocolate chips or other things like that I'm sure. You can think of a few other relevant examples too.
Absolutely thanks for putting a little bit of a frame around that that's helpful.
Your next question comes from Mark Mahaney with ISI. Your line is open.
Thanks, 2 questions. Please could you talk about.
What impact you would expect the Olympics to have.
Sure.
Look what's embedded in there I know from time to time, you have called out events like World Cup contribution. So just talk about what the impact I guess of a crowd with Olympics is likely to be this year and then your commentary about idea Fay.
Or are they you know the Apple changes it almost seems like Youre, Alex a little more muted than what we hear or little less uncertain than from from from other advertising platforms on their particular reasons. Why you think that the idea of the impact would be would be more certain would be clearer for you than it would be just to get bids maybe it's your advertiser base with the type of <unk>.
Formats just.
On a color on that would be helpful. Thanks, a lot.
Okay. Thanks, Mark So first on the Olympics were really excited about the Olympics 1 from an audience perspective. This is just a great way to engage people, who use Twitter, where they go they're going to be able to come to Twitter and find the metal moments right. After they happen.
Delights will be there there'll be pre roll in front of them from advertisers who've been waiting for this opportunity to connect with their customers around our big global event like this.
Thank you back to last year, where there were a lot of events that happened more fans werent understand Twitter took the place of the stand. It was the war on the crowd. It was 1 of the fewer places where advertisers can connect with their crushers and know that they'd be there. So we've been working hard to make sure that this can be a success for us it's going to be on Olympics. Unlike any other and it's still uncertain exactly how it plays out we.
Haven't broken it out in terms of how we quantify it we tend to do that less these days because it is.
You've got to judge how much outspend as truly incremental based on subjectivity in that and I don't think we'd do it justice, but when we step back from the dollars on the specific audience on a given day. This is a great opportunity to showcase with people how much better Twitter for the last time. It game if that was the World Cup or the Olympics or a different event as opposed to it than having Twitter as a part.
The daily habit and the same thing's true for advertisers. So we're really looking forward to the Olympics. So it didn't go on with the opening ceremony here. Shortly the second part of your question on <unk>.
So so far we're pleased with what we've seen but it's too early to call on long term churn I point you to a few different things. The first is we've worked really hard as long as the company has been around to build trust with the people who use our service hopefully that means that when they're prompted from Twitter and.
And we give them a really clear explanation of what we're asking hopefully that means theyre more likely to accept the product from us.
Then they might be from others second we've worked really hard to implement the <unk> network to give that data to third party measurement partners to now show map ads to people who have limit AD tracking on to continue to work on ways that we can help attribution with in a post cookie world.
Thank all of these things are helping us a bunch with with.
With advertisers and with the people who use our service, but given its really not been that long here, but everybody is upgraded and agencies and advertisers on the broader ecosystem likely hasnt fully adjusted yet we're going to have to wait and see how this plays out completely the last thing I'd point out is just remember at the end of last year, we were at 85% brand 15.
Percent, Dr and Theres still lots of opportunity for us to better leverage first party signal than we historically have and so we're probably coming at this from a different angle than many other AD platforms are and we see opportunity where others may see it differently.
Thank you Ned.
Yeah.
Your next question comes from Justin Post with Bank of America. Your line is open.
Great. Thank you maybe 1 more on U S da use in the quarter.
Any change in your top of funnel conversion to da use.
What kind of drove that quarter over quarter decline is it just less.
People coming on at the top of the funnel or maybe less repeats and then Ned you reiterated your view on $3.15, it sounds like Youre confident what could you just remind us what gives you that confidence is it.
Usage youre seeing for new products or as you look at the pipeline of products that are coming out do you feel optimistic on that how do you feel about what's going to be really drive U S. Users from here. Thank you.
Okay.
Hey, Justin first on <unk>, so when we step back and look across geographies across times of year and how people are coming to Twitter, it's been remarkably consistent and healthy so we're getting a lot of that path.
It evolves from 1 geography to another at different points in the year, but overall continues to be really healthy.
In the U S as new cycles come and go as habits evolve post COVID-19 hopefully.
People are still emerging there old pre COVID-19 habits with their new how many for many of the people that means.
Their new on Twitter and they are sorting out all kinds of different things that have changed in their life. So we're not sure exactly how that plays out but when we look at Q2.
To see healthy usage in service in the <unk> since it was consistent with what we saw pre Covid. We're not sure there is that much to read into it just yet.
Okay and then.
To your question.
Sorry, yes.
Yes, moving in the second partner Jeff.
And you're asking about the $3.15.
When we look at the 7 billion people on the World, who don't yet use Twitter when we look at the $300 million of them who are in the United States.
We still see lots of opportunity to add a whole groups of people, who look just like those that use the service today, whether they are in the U S or in other parts of the world and when we think about our product roadmap is designed to help all of them.
Better usage out of Twitter than they do today that top.
Funnel, which continues to be healthy and consistent gives us confidence that we're getting the at Bath and we just have to continue our work to help people find what they're looking for on feel safe being a part of the conversation.
Great. Thank you.
Thank you and brick and we'll take our next question from Twitter It comes from new accounts.
Hi, Lance Jones.
And he asks when Twitter plan to rollout Twitter blue globally.
Are there any plans for other subscription type offering for things like tweet deck.
Okay.
So we wanted to do or we want to learn as much as possible on line as quickly as possible. So we started with with 2 markets.
So we feel confident with optimized for <unk>.
We started with an initial package or features.
And then something small so if we could talk to a bunch of theories on.
And then build upon so where we are.
We're attempting to do right now I would like to try to make sure that we find.
Wright products.
Comfortable.
We're rolling out to the entire world and feel comfortable charging for it and of course everything is on the table on terms of what we're looking at.
Certainly those categories for individuals who want features.
<unk> also categories.
On our futures for businesses, where people who are trying to make money off of Twitter.
On a point to a pretty significant bundle as well so for silver linings business, we're moving as fast as we can.
But when I make sure that before we roll it out everywhere that would have something compelling that people aren't sure on answering trends for dollar store.
Thank you operator, we'll take the next question please.
Your next question comes from Eric Smith from Macquarie. Your line is open.
Great. Thanks for taking my questions.
Seems like SMB is clearly a focus area and it's nice to see accelerating revenue growth within that cohort on the enhanced functionality.
Is there any more color you may be can share on what the roadmap looks like on that front, whether it be types of placements youre exploring for this group of advertisers or sort of expanding sales head count.
That is focused on.
On the segment in that and then I had a quick follow up.
Yes.
Small businesses are really important to us.
There is a lot there were day foundational intellectual there, we're serving them better.
All of our focus on topics and big part of that focus is local.
Paul.
This is critical for any small business loans.
We're able to follow Mike My neighborhood, then also sit on the businesses within it.
So from a consumer perspective.
We're doing a lot, but also on the revenue product side.
We launched our rebuilt quick from offering, whereas the channel location age and gender targeting as.
As well as redesigned workflows, a lot of small businesses need or just something simple and straightforward. So they can get back to building their business on.
With this change alone drove a 26 increase in revenue per campaign versus before.
Before launch.
And then we launched the pilot of professional profiles with businesses nonprofits.
And publishers and other professionals.
Mike.
Keep on sort of know exactly.
What type of accounts are engaging with.
They might be engaging with the business or non profit, which ultimately lead to more tools for them to go spend on something as well.
Great. Thank you and just to follow up on I D. C is there anything you can share on house dance trended for you to ask questions Android users during the quarter.
Hey, Maria we haven't broken that out in the past I do think even if you've got a data point around it you may.
It may be too early to draw a straight line between data points. There's just a lot that advertisers agencies. The broader ecosystem I think we will do in the coming quarters to adjust to the different data that they've got when they make decisions about where they advertise and how they measure success of their advertising and so there will be near term.
And there would be anecdotal support lots of theories, but I think it's just going to take a little time here when we step back on we feel really good about how we've shown up so far and our ability to continue to leverage.
Do a better and better job leveraging our unique first party data when we're helping advertisers on Twitter.
Got it that's very helpful. Thank you for the color.
Your next question comes from Brian Nowak with Morgan Stanley. Your line is open.
Great. Thanks for taking my questions I have 2.
Suddenly the USDA you yeah, it's getting a lot of attention, maybe 1 way to sort of clear it up a little bit could you just help us understand a little bit what's going on on time spent per user per day or time spent in the parts of the world that are a little more reopened and maybe the engagement trends are.
More important than the actual number of people to help us on on time spent a little bit. If you could then the second 1 just to go back to Justin's question earlier on the forward drivers of USD 3.
$300 million ish Americans on a lot of them or not on the platform what are sort of like 1 or 2 of the key hurdles. You think you really need to overcome to convert more of those Americans, who use the platform more regularly.
Hey on the first part of the question and then I'll turn it to Jack on some of the opportunities on the product.
We haven't broken out time spent Bryan.
We don't solve for time spent we saw for giving people a great experience on Twitter if they come looking for a highlight they come looking for a conversation or they're looking to get informed about our broad array of topics, we want to solve what theyre looking for and then help them get on with whatever they were doing before if we do that they'll come back to Twitter the.
Right amount and we will continue to build trust with them that we can solve what they're looking for when they're looking for so I'm not sure of the times debt would help as much I'd just keep watching at D. A <unk> number because as we continue to grow that through continuing to improve the product and make sure that when the events and topics that are happening and will bring people to Twitter.
We're doing a better and better job for them.
<unk> never seen any of the best way to measure success, Let me turn to Jack on the second part of your question.
I think the biggest opportunity that we have.
And you're on.
And also globally.
This is around reconsideration on 1 when people see a threat or when they see a discussion around the topic.
They're coming to.
Our service on their finding something else with finding something else that interest on.
And.
Now that we have a much broader base of topics the algorithms are or better until there's a final on the most relevant.
And we have the performance, which.
Some of these topics on such as spaces.
For more and more of that narrow casting.
Use case.
Gets even stronger.
But I think there's a really strong a reconsideration associated whether it's tied to events like sports.
And obviously news events as well so.
We're we're looking for.
Much more.
We're moving a lot more friction from on boarding and re on boarding.
On the sign up flow itself.
The recent info in many cases.
To make sure that when people come in for 1 reason.
However, small that is.
They are seeing a much broader universe.
A lot more runway to them then.
On the past when they followed 1 account.
On the found 1 or 2 relevant tweets on all on.
On a on the episodic basis. So now we have a much better chance there on that.
Just making sure that we get the right.
With us.
Okay.
Both.
Your next question comes from Deepak misses on Internet or free Kim Your line is open.
Hey, guys. Thanks for taking the question I'm on.
On to ask about fleet. The final of engagement has proven to be very successful on other platforms. What was the challenge for trigger to make the decision to.
Shut it down and then related to that in <unk>. There for a few days and we saw some big brands advertised there is there opportunity to bring those at full screen into news feed on our other areas of the App given the better form factor it feels like the ads actually have a price premium pricing just wanted to get your thoughts there.
Yes, the original problem, we're trying to solve with.
With fleets was around with BMO.
And helping people.
Feel comfortable sharing something.
You don't have to worry about being on a public records forever.
We chose the stories format.
Because it was understood because so many platforms has adopted it from snapshot.
<unk>.
It wasn't really a bit and it caused a little bit of confusion between the 2.
The purpose in the job growth for Creatives in General fleet. So.
In solving that problem.
I think we can do a much better growth.
I think we can do it with a format that is unique to Twitter.
Which is important because it will.
Grow a lot more of our ecosystem instead of just playing catch up with the former.
Right.
10.2.
Constantly evolve based on visual fuels Qs rather than like really going after the jobs that we're trying to solve.
So.
We wanted to make sure that we are.
Asking without hesitation, when we see something not exactly but we could have kept it for many more years of metalwork, but I'd rather spend my time on stuff.
That's going to be very index, Twitter and really move the needle for us and there wasn't that.
Hey, Deepak I'd just add.
We don't need fleets in order to use more of the screen to help advertisers connect with their customers and so when you see us testing ad formats.
You should think about the broader opportunity we have to leverage that innovation in other ways to help advertisers and we're excited about how that can play out in the coming quarters.
Your next question comes from Rob Sanderson Loop capital Your line is open.
Yes, thanks, good afternoon, and thanks for taking my questions.
And this is for net net I wanted to maybe dig a little deeper on your revenue durability efforts.
Specifically the business models around some of the new opportunities here.
Your understanding where at the starting line of course, and just helping looking for help framing the longer term opportunities.
Twitter blew it seems fairly obvious, but the new products for creator monetization.
Should we assume as a revenue share opportunities for Twitter I guess they might be.
Will there be revenue in the near term is the initial focus more on building awareness and adoption and revenue model will develop over time.
That's question 1.
How should we think about the potential here, we look at across the Pacific in things like gifting or very significant revenue contributors to the Chinese social networks, and we are in a culture where.
When people, obviously water compensate great services I can see some to match here and how should we think about that on the revenue impact of these types of new products and our scale over time and kind of along these lines and rounding up the business model considerations. We think these things would have fairly marginal costs, assuming they're booked on a.
A net revenue basis, but.
What kind of framework you can you provide debt at the starting line here just to think about just the business model considerations as some of these services hopefully catch in growth.
Contributors over time.
Thanks, Rob that's a great question I think the most helpful framing would be for you to consider that we're creating the value then the.
Customer would be paying Twitter and evaluate accrue to us this would be for something like tweet deck or the features that we've put in Twitter blue, which will continue to evolve as we test and learn.
If the creator is creating great content and you see it in Super follows or its just a tweet and somebody puts money in their tip jar or it's long form content that we include in a different price point for a subscription.
Without ads that's complemented with other features that come from US then we would make sure that the part of the value that can be attributed to the creator where those dollars go to them and we're facilitating a transaction. If we do that we're going to help creators build and nurture.
And grow their.
Volume base on the service they will continue to create great free content and they will also create great paid content as well and if there is lots of good things happening on Twitter there'll be great ways for us to monetize the service, whether it be ads subscriptions or otherwise.
Think about the helping creators as a way to make sure there's great content on the service and to make sure that those creators get paid and that they can find their customer base and think about the other services, where we're providing the value as a way for us to.
To exchange value with the customers debt.
Great. That's helpful. Thank you Ned.
Your next question comes from Brent that Jeff.
Your line is open.
Thanks, Hey, Ned just on pricing I am just curious if you could just frame.
First half versus second half and your expectations on on overall pricing and anything surprising you that maybe you didn't see in your Crystal ball.
<unk>.
Thanks, Brent first on the Crystal ball, which we have won.
<unk> definitely incorporated too much of the beginning of the quarter into our guidance.
When we guided for Q2, where we got off to a slower start in terms of brand in January and February and March we saw strength and we will equal weighted them in the guidance and that strength from March really continued throughout Q2.
So.
So so much for the Crystal ball on the second part of your question about pricing. There. There are lots of different factors that play into pricing and so as you've seen in the past with US. If you go back to 2018 as an example, there are times where cost per engagement can go down dramatically and revenue growth can be pretty significant.
And I point that out because as you think about the mix of brand versus Dr. As you think of on what the threshold is for something to be a click.
We're now at the point, where.
More than half of the videos that you see on Twitter and ads are 15 seconds or less it's taken us a long time to get there the likelihood that those debt. We ended that we get paid for them that the advertiser realizes their objective is higher than it is for longer videos. Typically this is a great example of something that can throw on <unk>.
Wrench in Comparables, when you look at AD engagements or cost per engagement and so I would focus less on the pricing and more on the return on investment for the advertiser and when we are improving.
Age based targeting location based on improving the formats growing the audience and hopefully over time continued to see a mix shift towards Dr from brand.
There are lots of ways that can play out well for advertisers some of them include pricing being higher, but others, where pricing is meaningfully lower and they're just getting more reach and more return and therefore invest even more against our growing audience.
Thank you.
Thank you and I think we have time for just 1 last question. Please.
Your last question comes from Mark Smartly Covid.
Your line is now open.
Great. Thanks for fitting in my question.
A quick follow on to that last answer.
I think in the shareholder letter bandwidth ex that.
Exceptional momentum was referred to.
If we think about weighted dimensionalize that is it a lot of it kind of upfront on these advertisers coming back with events is it some of these new formats that are appealing and growing share of wallet or is that new advertisers coming on the platform for the first time ever any color you can share on what's driving that momentum.
Placed a lot of those things that's driving the momentum it's been less about new advertisers and more about growing our share of wallet.
And those advertisers spending more than they had in previous periods broadly and hopefully as well on Twitter over time, we do think we can grow the number of advertisers on our service book, because we can show an incredible value proposition to lots of medium size advertisers, who haven't historically advertised with us where our sales team can continue.
Can you do a great job growing the dollars spent by some small businesses, but also where the work we're doing around topics. The work. We're doing on quick promote the work we're doing to make it easier to buy ads and see the return from those ads first of all advertisers will help us meaningfully grow the number of advertisers there are millions of small businesses on Twitter today, but.
Most of them don't yet advertise because we haven't made a good case to them what the value proposition is our made it easy for them to do it. So I think the benefits of growing the advertiser base are in front of us and the strength that we're seeing today is about that larger audience with better AD formats with more relevance with a really strong <unk>.
Economic backdrop of events coming back more product launches and a lot of that to come in the second half of the year as well.
This includes gaming session I will now turn the call back over to Ned Segal for closing remarks.
Alright, thanks for joining US everybody. We appreciate your interest in Twitter and we look forward to speaking with you next quarter. When we report earnings for Q3 on October 26. After the market closes until then we'll see you on Twitter.
Yeah.
Ladies and gentlemen, thank you for participating in today's program. This concludes the program you may all disconnect have a good day everyone.
Right.
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