If all the Internet’s clamouring is to be believed, then Twitter is on its way out. The social media company has struggled through 2014 against news of significant drops in the value of its shares as well as figures that show stagnating user growth; worrying signs for a company that is still struggling to convince its backers that it has a future, let alone offer them any kind of worthwhile return on their investment.
Naturally, a number of journalists have leapt on the news that Twitter’s growth is coming to a halt by drawing perfunctory comparisons between the micro-blogging platform and the decaying remnants of once pioneering websites like Myspace and Friendster.
The question of whether permanence is attainable for a service like Twitter seems to have completely escaped the conversation. Instead, people seem content in consigning Twitter to that endless cycle of social media websites that have bloomed and wilted since the rise and fall of AOL on the cusp of the millennium.
The concerns are well founded: the most recent figures put the number of Twitter’s monthly active users at around 284 million, roughly a fifth of Facebook’s 1.3 billion members. Compounding this gulf in membership size is the announcement that user engagement, as measured through timeline views per user, has dropped by 7%. While user growth is up 23%, it’s marginally lower than the previous annual growth figure of 24%, suggesting that if Twitter is to catch up to Facebook, it’ll need to seriously up its game.
It’s been clear for some time now that Twitter needs to bring in a substantially larger audience in order to truly exploit its promotional content. If the service wishes to keep its investors happy – and to grow as a company – it’ll need people who will click on sponsored links, engage with the platform and spend more time there.
As things stand, Twitter is doing a reasonably decent job at monetizing its services. The company has managed to wring an impressive $1.77 out of every thousand views of its timeline, an 83% increase on the same period last year. Revenue has more than doubled over last year’s figures for Q3, to a respectable $361 million, exceeding expectations by $10 million.
However, this equates to a mere $7 million profit for the company, which while being exactly what was predicted for it, will not be enough to keep investors interested. It’s also worth noting that the company is still losing money due to the millions it spends on stock compensation, a result of its growing workforce. Worse still, the increased emphasis on monetization has begun to turn the initial champions of the service off the platform, as the line between Twitter and Facebook becomes increasingly blurred.
Among the attempts being made by Twitter to monetize their platform are the already prevalent promoted tweets, hashtags and trends. Engagement rates for promoted trends have been particularly effective with users, rewarding advertisers with engagement rates of between 3% and 10%, which includes any click-throughs, retweets and favourites of promotional content.
Twitter: Key Statistics
While user engagement with these promotions is positive, they simply don’t deliver the required financial returns, and Twitter must be careful not to flood users with sponsored material. Indeed, inserting irrelevant content where it’s not wanted is one of the oft-cited reasons for the decline of Myspace, and it’s one of the reasons that Facebook is falling out of favour with so many of its initial adopters.
Then, of course, there’s Twitter’s plan to introduce an algorithmically organized timeline, which will prioritise the perceived relevance of tweets over their chronological importance. This has been a masterstroke for Facebook, drawing in more occasional users and focussing on video and image related content in order to ramp up user engagement. For Twitter however, this change poses a fundamental threat to the initial pact made with users that placed importance on the speed and transparency of content over what inevitably becomes a stream of populist, feel-good dross under a more commercialised approach.
Twitter is already testing the waters by randomly surfacing the tweets of accounts your followees follow, even if they haven’t retweeted the post. Sound familiar? That’s because it is. The number of posts that crop up on Facebook from accounts and posts that your friends have liked or commented on is staggering, and Twitter seems to be following suit.
The obvious issue here is that Facebook already exists, and it’s enormous. If Twitter lets go of its own niche in the online market, it’ll lose more than its core audience; it’ll lose any reason for new users to sign up in the first place. Twitter’s initial draw was that it gave users their own platform on which to curate relevant content for themselves through a binary following mechanic. Users could follow the news they wanted to read and interact with the communities they wanted to connect with, safe in the knowledge that sketchy political views, lame cat videos and sexist bilge would at no point enter the fray.
These incremental adjustments make up Twitter’s collective response to those gloomy statistics that have had its investors on edge in recent months. But the problems behind Twitter’s seeming deflation are more complex than a mere case of not having enough users.
“It’s too filled with spam and hate speech and unverified content”
The landscape of Twitter has changed a lot since its inception. That service – driven by bloggers, journalists and small communities of enthusiasts – has grown into something truly massive, but that growth has only thrown up additional problems. Twitter is now more cacophonous, vitriolic and fragmented than it was in those early days; occasionally it’s terrifying.
One needs only to look at the recent controversy that unravelled under the hashtag of Gamergate to see just how dark Twitter can be. What started out as a complaint about the relationship between the gaming industry and the gaming press rapidly devolved into a shit-flinging contest between two indefinable groups, each one rallying on either side of an increasingly cagey topic … harassment, name-calling and death threats ensued.
Instances such as these have soured the Twitter experience. In creating a platform that enables all users to contact anyone in such a simple manner, while simultaneously failing to supply those users with adequate tools for reporting harassers and trolls, Twitter have allowed a number of abusive, vocal and relentless users to proliferate within their service. The more this kind of behaviour becomes synonymous with Twitter, the less likely it is that the company will attract the mainstream users it so desperately wants.
Social media veteran, Margarita Noriega, has described Twitter as “the new comment section,” explaining that, “It’s changed, and unfortunately, it’s gotten a lot worse. It’s too filled with spam and hate speech and unverified content”. She’s right: Twitter is becoming less like a place for conversations and more like an endless stream of increasingly disparate thoughts. Twitter’s relentless focus on increasing its user numbers has come at the cost of a detrimental shift in the signal-to-noise ratio of the platform.
So is it game over for Twitter? Was it – like so many social networks before it – simply not meant to be?
While it’s not currently evident in the service, Twitter is showing some promising signs of forward thinking, enough at least to assuage concerns that they’re about to pull a Myspace. A number of small additions to the service are currently in the works that explore new, less ad-oriented ways of generating revenue through the social network.
For example, a “buy” button is currently in the works, which if fully implemented, would allow users to buy items directly through tweets that are pushing certain products or services. A number of partners have signed up to the test, including non-profit group Nature Conservancy, rapper Eminem and US retailer The Home Depot. The plan is that companies will tweet about products with the “buy” button attached to the post, allowing their followers the option to buy with ease, while eschewing the invasive and indirect path of sponsored tweets.
Enticingly, Twitter’s CEO Dick Costolo, announced that the platform’s actual reach, in terms of people who see Twitter content in any form, is around the 500 million mark, which includes visitors who see individual tweets, embedded content, hashtags and profiles. Beyond that, Costolo also stated that Twitter receives around 125 million homepage views each month, which suggests that there are plenty of people who are still undecided about signing up.
These numbers offer a fantastic source of additional revenue to the micro-blogging service, one that they have plans to make use of. New features that are in production, such as an instant timeline for new users and timeline highlights for inactive users, aim to push content in an effort to keep users engaged with the service. A simplification of the joining process is also underway, which aims to bring more of those 125 million monthly homepage visits into the site more permanently.
More positive signs are to be found in the revenue that Twitter is generating through mobile usage. The company is currently making 85% of their revenue through mobile advertising, while by comparison Facebook drew just 66% of their quarterly revenue from mobile usage. This show’s that Twitter’s strength and user base is in the mobile world, and the mobile world is still very much on the up.
Provided that Twitter doesn’t get carried away with draining every last cent from their user base, its audience will have no reason to go elsewhere. The fact that Twitter is taking another look at their current reporting tools is yet another reassuring nod that they’re heading in the right direction.
Twitter’s current strength is undeniably reliant on its user numbers, and they should be constantly working on improving them. Vitally though, Twitter is still a platform that people want to use, and that’s because it still has a lot to offer its users.
There are thousands of conversations happening on Twitter each day that simply aren’t happening elsewhere: between celebrities and their fans, politicians and activists, students and professionals – almost always between total strangers. It’s beautiful, if a little messy, but at the moment there’s nothing quite like it.