Twitter turns ten this week, but it continues to suffer a difficult year, with share prices plummeting, key executives jumping ship and new user growth stalling for the first time in its ten-year history.
Last year, co-founder Jack Dorsey returned as ceo to try and bring the company out of a tailspin that has left it with a two billion dollar deficit and a product that seems increasingly unsure of itself.
Rumours of an impending takeover by Facebook or Google have been rife in recent months, but Twitter’s long-term prospects depend on it sorting out several key issues which have left it losing ground in an unforgiving marketplace.
So what are Twitter’s problems?
Lack of monetisation
Social networks tend to build a large pool of users first and worry about how to monetise them later. Nobody wants to join a new social network that’s plastered with ads. Twitter amassed a huge user base – currently around 300 million active users – but has struggled to find an advertising product that doesn’t push people away.
Twitter’s ad products were always designed to look native. Promoted tweets, trending topics and recommended accounts are nestled among organic results. But advertisers have been disappointed with the in-stream ads Twitter has offered.
Twitter’s ads underperformed against Facebook’s, despite the average CPM being five times as expensive. The fact is that Facebook’s network reach dwarfs that of Twitter, it offers a far more diverse demographic and its users share things ten times as much. Twitter needs to work out a way of offering real value to advertisers without scaring off users. Not an easy task.
Twitter is an important part of modern culture. It’s a place where revolutions are born and where vital information gets spread during good times and bad. Hashtags and live-tweeting have changed the way we communicate. Virtually every president and prime minister on earth has an account.
But none of this necessarily makes Twitter profitable. And tech investors are losing patience with social networks whose dazzling valuations are now causing worries of a second dot com bubble.
In a February earnings report, Twitter warned that user growth will continue to stall and profitability is unlikely any time soon. Its focus is now on making itself indispensable again.
Twitter has never been an easy sell to casual users. Dorsey recently conceded that “new users may initially find our product confusing”, noting that there’s a “perception that our products and services are only useful to users who tweet, or to influential users with large audiences”.
The constant tinkering with its core product certainly hasn’t helped. The possibility of changing the two features that have defined the platform since its launch – the 140-character limit and the chronological presentation – don’t inspire confidence in the platform’s staying power against other, more visual platforms like Instagram and Snapchat.
Twitter is doing the right thing in trying to make its product simpler but it risks losing its identity by becoming a noisier version of a Facebook feed. The Lists feature is a great way to split your timeline into categorised groups but without a third party application you can’t see them all at once. Twitter is the only social network that gets more frustrating the more you use it.
A bad atmosphere
In addition, Twitter has become an increasingly hostile environment, with countless cases of individuals being publicly shamed on the platform. The dark side of Twitter’s collectivist ecosystem is the “snowflake in an avalanche” effect that creates a diffusion of responsibility amongst those who participate in mass shamings. Nobody takes the blame, apart from Twitter itself.
Twitter’s reporting system is notoriously difficult to enforce on a platform that encourages handles over real names and requires only a fresh email address to create a new account.
Anyway, editorial censorship is likely to cause a backlash from users who would see it as a slippery slope towards letting people silence any negative attention, however justified. And yet the difference between simply posting a negative opinion about someone and bullying them is difficult to judge even by humans, let alone an automated process.
So what’s next?
Making headlines and getting celebrities and world leaders to use your product is great for attracting new users, but it won’t keep them there unless you offer them something that’s both enjoyable to use and provides genuine value – the huge number of dormant accounts is clear evidence of that.
Twitter is likely to sink more money into R&D and acquisitions in order to overhaul its product. Buying Periscope, a live-streaming video service, was a good start.
But there are still problems with its advertising product and the only way it can fix them is to put its users first and advertisers second. The recent acquisition of cross-platform tech company TellApart, which allows advertisers to remarket to users who aren’t logged in or don’t have an account, is concerning.
Jack Dorsey recently announced a big restructure of Twitter’s staff, slimming down its team and pledging to recruit new top talent. A bit of downsizing isn’t such a bad thing for the brand. Perhaps Twitter could benefit from changing its identity from “the big idea that was meant to change the world” to being just another quietly efficient tech company.