Are Twitter Inc.'s (TWTR) - Get Report turnaround efforts paying off or floundering? It depends on what part of the company you're looking at.

When it comes to monetizing its unique content, Twitter is indeed showing real improvement, even if the company is still at a big competitive disadvantage to larger rivals in some respects. Twitter's Q2 results provide evidence: While revenue of $573.9 million was down 5% annually, it rose 5% sequentially and was well above a $537 million consensus analyst estimate.

A 16% sequential improvement in international ad sales offset a 5% drop in U.S. ad sales, and Twitter also got a boost from a 13% sequential and 26% annual increase in "data licensing & other" revenue, which now accounts for 15% of total revenue. With Twitter reporting it had signed "a significant number" of enterprise licensing deals in Q2, corporate interest in mining Twitter's content "firehose" for breaking news, insights into consumer sentiment and other data seems to be steadily growing.

When it comes to ad sales, the fact that Twitter has much less scale and targeting data -- whether for individuals or demographic groups -- still puts it at a clear disadvantage to Facebook Inc. (FB) - Get Report and Alphabet Inc./Google (GOOGL) - Get Report . It also doesn't help that Facebook and Google can provide a much broader array of ad products to marketers, and that users browsing past hundreds of tweets in a day can be prone to glossing over "Promoted" tweets from advertisers without really viewing them (never mind engaging with them).

Still, it's worth keeping in mind that Twitter is trying to grow ad sales off a pretty small base. In Q2, the company averaged only $1.49 in ad revenue for its 328 million monthly active users (MAUs), and $3.96 for its 68 million U.S. MAUs. Facebook, for comparison, averaged $4.65 in ad revenue for its 2.01 billion global MAUs, and $18.93 for its 236 million North American MAUs.

It's unrealistic to expect to raise its per-user ad revenue to Facebook's Q2 levels, especially since Facebook claims higher usage rates for its MAUs. But simply getting global and U.S. per-user ad revenues to, say, $2.50 and $5 would be a big deal. And since Anthony Noto (formerly Twitter's CFO) was named COO and put in charge of Twitter's "revenue-generating organizations" last November, there have been signs that those "organizations" are executing better.

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These signs include not only the fact that Twitter has easily topped (admittedly conservative) revenue estimates the last two quarters and seen a clear pickup in data licensing deal activity, but also how improved targeting is yielding higher ad engagement rates and (with the help of lower ad prices) better average returns on ad campaigns. While Twitter's cost per engagement (average ad price) fell 53% annually in Q2, its ad engagements grew 95%, thanks in large part to video ad growth.

Anecdotally, there also seem to be signs of better execution. Twitter appears to have gotten more aggressive about tapping into data on consumer shopping activity (including offline purchases) and digital content consumption to deliver targeted ads. And the number of major publishers showing "pre-roll" video ads that appear before video clips attached to tweets seems to be growing.

But such actions will only get Twitter so far if it can't meaningfully grow its user base. And here, the story isn't nearly as encouraging.

After growing by nine million sequentially in Q1 with the help of well-publicized "Trump bump," MAUs were flat sequentially in Q2, and up by just 5% annually. Moreover, U.S. MAUs, clearly more valuable revenue-wise than international MAUs, fell by two million sequentially after growing by three million in Q1. Annual global daily active user (DAU) growth was a healthier 12%, but this still trailed the 17% growth Facebook saw for a much larger base, and Twitter is still declining to provide a specific DAU figure.

The company's anemic MAU growth comes in spite of a long list of Twitter product initiatives that CEO Jack Dorsey has promised would greatly boost Twitter's appeal. These include the launch of an "In Case You Missed It" feature that relies on an algorithm to show interesting tweets published since a user last logged in, as well as the creation of an Explore tab for discovering content, the expansion of Twitter's Moments feature to let regular users create their own Moments and more aggressive efforts to crack down on abuse and harassment.

Part of the problem here is that Twitter remains unwilling to consider more radical changes to a user experience that clearly bewilders and/or frustrates many consumers. The company remains stubbornly wedded to its 140-character limit (24 characters are docked for every link that's included), and also doesn't provide any easy way to attach longer pieces of text.

The challenges new users face in finding good accounts to follow is also a problem, as is the fact that regular users posting on Twitter (unlike ones posting on Facebook or Instagram) often see little engagement for the content they share, which can quickly discourage them from tweeting. Twitter's poor product execution is also reflected in a failure to implement more basic features that many users would like, such as the ability to edit tweets or easily toggle between the "In Case You Missed It" feature and a standard reverse chronological Timeline view.

And while interest in both President Trump's Twitter account and those commenting on the Trump Administration's activities has been a short-term boon for Twitter usage, one has to wonder if it's a dual-edged sword. Timelines have become dominated by political tweets to an unprecedented degree, and much of the discourse is inevitably bitter, rancorous and linked to one political echo chamber or another.

Many devoted Twitter users are clearly fine with this state of affairs, but (judging by MAU trends) a lot of consumers are alienated by it or simply feel they have better uses for their time -- such as checking out the friendlier confines of Facebook or Instagram, for example.

None of this changes the fact that Twitter maintains tremendous value as a news and communications platform. For proof, one only has to see useful it has been over the last week as a means of following Hurricane Harvey and related rescue efforts. But this value has existed for a long time -- as have the core problems with Twitter's user experience that turn off many consumers who might otherwise be reeled in by the power of its platform.

And until those core problems are meaningfully fixed, better ad execution will only accomplish so much.

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Editors' pick: Originally published Aug. 31.