Twitter’s (TWTR - Free Report) focus on increasing ad transparency is evident from the company’s latest announcement to back the Honest Ads Act for regulating political advertisements.
In a tweet, the company stated that “We believe the Honest Ads Act provides an appropriate framework for such ads and look forward to working with bill sponsors and others to continue to refine and advance this important proposal.”
A few days back, Facebook (FB - Free Report) CEO Mark Zuckerberg endorsed the bill citing that the company’s prerogative is to add more lucidity to political advertisement in order to prevent any interference in the upcoming elections to be held across multiple countries.
Since the 2016 U.S. Presidential elections, Twitter along with Facebook and Alphabet’s (GOOGL - Free Report) Google have faced severe criticisms for spreading fake news that allegedly influenced election results.
The companies’ security loopholes grabbed attention of government regulators again after Facebook’s Cambridge Analytica data breach incident came into limelight. Rising demand for privacy protection has put pressure on regulators to scrutinize data collection, storage and access policies of these platform providers.
We believe, a number of initiatives taken by these companies to make the platforms free of malpractices will help restore the companies’ lost brand image.
Twitter: Screams for Takers
Despite the ongoing controversy in the social media market, Twitter maintains an edge over its competitors. Shares of Twitter have returned 106.4% in the past year, substantially outperforming the 31.2% rally of the industry it belongs to. In comparison, Facebook has gained 17.97% while Snapchat parent Snap (SNAP - Free Report) has lost 30.1%.
Twitter’s outperformance can be attributed to its initiatives taken to repair brand image and create a “safer environment.” Last October, Twitter announced that it will provide users with more detailed information regarding advertisements posted on the platform, more specifically the political and issue-based campaigns.
Twitter’s efforts to restrain contents promoting violence, hatred and harassment on the platform are also noteworthy. The company has recently joined forces with Facebook and Google to ban cryptocurrency ads from the platform.
Per Twitter’s lately released Transparency Report, more than 1.2 million accounts have been suspended since August 2015. Moreover, since Jul 1, 2017 to Dec 31, 2017, the company permanently banned a total of 274,460 accounts linked with terrorism.
Twitter’s proactive stance in eliminating malpractices on its platform will surely boost its brand value, eventually attracting advertisers and driving up the top line.
Twitter sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
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