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Here's How Twitter's Expanded Partnership with Crimson Hexagon Will Help Boost Sales Growth

Shares of Twitter, Inc. TWTR continues to surge today after crushing both earnings and revenues estimates and demonstrating promising user growth for the first-quarter of 2017.

Twitter added nine million monthly active users to a total of 328 million monthly users. Furthermore, daily users also grew 14% from a year ago. With advertising being the primary stream of revenue, user growth and user base are vital measurements for advertisers. (To learn more about Twitter’s Q1 result, check out this Zacks article: Here’s Why Twitter (TWTR) Smashed Earnings and Revenue Estimates)

While the company showed signs that it knows how to attract users, it is still far from demonstrating a profitable quarter. With its total users still well below rivals like Facebook Inc. FB, Twitter needs to find another way to compete. With its newly announced partnership, Twitter may have found its strength.

Data Analytic

On the same day that Twitter released its first-quarter results, it also announced a further partnership with Crimson Hexagon, the social media analytics company.

While data licensing sales bring in only $74 million of its total revenue, it is an area that Twitter can offer and Facebook can't.  "Facebook's product isn't set up for public conversations, but rather for private sharing among friends," wrote Elizabeth Dwoskin, a technology reporter for The Wall Street Journal. On the other hand, engagements on Twitter are public.

Crimson Hexagon, a leading provider of business insights from social data analysis, has amounted to more than 1 trillion publicly available social media data that can provide enterprises the insights needed for successful business strategy.

The social data will not only benefit companies through advertising and marketing, but in can also optimize the hiring process. By analyzing data from a company's current and prospective employees, the company can correctly assess workers' performance and improved recruitment.

In today's data-driven world, Twitter's user growth can only mean more valuable data to offer to brands and enterprises. Not only will Twitter further increase their sales in data licensing, but it will also make advertising on its platform more lucrative.

Companies can get more efficient results from Twitter's three current advertising formats--promoted trends, accounts, and tweets--backed by the large data planned strategy.

The Boston-based data analysis company has been storing tweets since 2010, and it can create comprehensive reports for brands from trends uncovered by historical data.

“Combining Twitter’s full data platform with Crimson Hexagon’s advanced analytics capabilities enables the world’s biggest brands to answer strategic business questions, discover patterns in consumer discussion, and uncover their customers’ interests and affinities,” said Anthony Noto, Twitter’s COO & CFO.

With Crimson Hexagon's algorithm, Twitter can show companies real-time feedback from their marketing campaign and make adjustments accordingly. Positive and negative trends that will take a while for humans to realize, the social-data firms can spot them right away.

The deepening partnership allows Crimson Hexagon to have complete access to every data product and stream that Twitter offers. Additionally, the two companies are collaborating on new ways that Twitter can help brands and agencies. The California-based company will be able to provide different tiers of data access at different costs.

Bottom Line

While being President Trump’s favorite platform to express his thoughts didn’t help Twitter with growing its user population, making the social network safer and more engaging did.

Twitter's first quarter has proven to investors that the company is focusing on the right issues to make the company profitable. Active social-data analytics will draw more advertisers to Twitter, and it will also allow Twitter to make smarter business decisions to grow sales further.

Twitter is up 4.46% to $16.52 per share in midday trading Thursday.

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