About 60 million user users leave Twitter each month. CFO Ned Segal told an investor conference in mid-November
About 60 million User users quit Twitter every month. Speaking at an investor conference in mid-November, CFO Ned Segal found that 2 million users re-activate inactive accounts (more than 30 days after their last activity) or create a new account every day.
Users quit Twitter
Segal noted that one-third of the 2 million accounts are completely new users and equates to around 243 million completely new users during the year. Last year, former finance director and current chief operating officer Anthony Noto stated that Twitter had 700 million active users on an annual basis, so about 35% of those users were really new to Twitter. With a modest growth of users in the last year, the company, therefore, retains only about two thirds of its users in a given year.
This aspect, absent in the speech of Noto last year, highlights how serious the problem of non-loyalty of Twitter users is.
Because users quit Twitter
The low loyalty of users without a doubt one of the main reasons for the overall lack of growth of Twitter users. In the last year, the platform has increased monthly active users by 4%; in comparison, Facebook (NASDAQ: FB) reported a 16% user growth and the number of Instagram users increased by over 33%.
But even more important than the growth of users, Twitter's poor ability to monetize its users and poor user retention makes the task much more challenging.
Twitter has two primary revenue sources: data advertising and data licensing. Both businesses require in-depth databases to maximize revenue and more user data improves ad targeting and allows data licensees to get more value from Twitter data sets.
However, with 60 million monthly Twitter users providing minimal or non-existent user data, these users are of limited value compared to Twitter's key user base. The impact of the phenomenon visible in the biggest complaint of advertisers on Twitter: the return on investment is not up to that of competitors like Facebook.
Twitter advertising revenue declined for four consecutive quarters after deciding to de-emphasize some advertising products earlier this year. The sector was already showing negative signals before the decision and it is not clear when Twitter's entitlements can again start to grow.
Twitter wants to solve the problem.
First of all, Twitter is investing to improve its product for the benefit of users. Segal points out that it has improved the disconnection experience, made the onboarding process easier, ordered the timeline algorithmically, rather than chronologically, added a new "explore" tab to discover new content and doubled the number of characters available for tweets . Most of these changes, however, took place over a year ago and Twitter is still facing the same problem of retention of users it had last year.
Twitter's video-related efforts could help attract more users to the platform; the company is investing heavily in new videos and Noto says its goal is to offer live video streaming 24/7, but while videos, especially high-profile ones, can attract users to the platform, they don't necessarily help the platform to keep users on social media
The Twitter news for users and advertisers
Secondly, Twitter is working to improve advertising products. He recently introduced a subscription service for small advertisers, in which Twitter will run and optimize advertising campaigns for them. The goal is to show a better ROI for advertisers, one of the biggest challenges for marketers on the platform. Similarly, Twitter is expanding its data licensing products to attract small businesses.
These investments cost and Twitter has exhausted the possibilities to cut costs. If new Twitter products fail to improve user retention or return on investment for advertisers, Twitter will probably not be a profitable company for a long time. Management expects to make a profit in the fourth quarter, but revenues are seasonally strong in that quarter and the economic situation could easily return to the red mark again in 2018.