Twitter's vision for a 'healthier' platform comes at the expense of user growth

Twitter is chasing a 'healthier', less opaque platform but it's at the expense of user growth / Twitter

Twitter has said it will continue to focus on the "health" of its platform at the expense of user growth, revealing that the number of people using it each month had declined to the tune of a million over the past quarter.

The social network ended June with 335 million monthly active users, down from the 336 million it reported in the first quarter of 2018.

Twitter's chief executive Jack Dorsey told investors during an earnings update that the loss of one million users was the price Twitter had to pay for prioritising the "health" of its platform and to a lesser extent, investing resources in GDPR compliance.

Back in March, Dorsey said Twitter was committed to "increasing the collective health, openness and civility of public conversation". At the time, he highlighted how the company's well-documented issues (including trolls, abuse, harassment and bot manipulation) had come to impact wider society, and said Twitter would now play a role in changing that.

Numbers at a glance

  • Revenue: $711m, up 24% YOY
  • Ad revenue: $601m, up 23% YOY
  • Monlthy active users: 326m, down 1m on Q1 but up 11% YOY

Twitter admitted that blocking some inactive, fake or offensive accounts as a result of this pledge has contributed to the significant drop in monthly users between the first two quarters of the year.

However, it was not the only catalyst for the drop. The company also said in a letter to shareholders that not moving towards paid SMS carrier relationships (which allows people with low-data plans to tweet via text messaging) in certain markets and a minor impact from new EU data protection laws had also compounded the numbers.

Despite this explanation, and the fact that the most recent figure was up 11% year-on-year from 326 million, the drop has caused investor jitters, resulting in a plunge in the social network's stock value.

In May and June, Twitter removed around 70 million accounts, but Twitter's chief financial officer Ned Segal clarified that this purge was excluded from the most recent set of figures because most weren't classed as "active", having been absent from the site for 30 days or more.

Dorsey was firm that Twitter's focus on improving the health of the platfom would, in the long-term, help its "growth story," even if it doesn't appear so now.

"We do believe that our health work and improving the health of the public conversation on Twitter is a growth factor for the long-term," he said.

"We want to make sure that we're building this into our DNA, we want to make sure that we are able to measure it and [that we're] held accountable to it as well. One of the big reasons that we're doing it is that when we do focus on people removing some of the burden of people reporting, blocking or muting we do see positive results in our numbers.

"It's still early, we have a lot more work to do, especially in applying machine learning, deep learning and newer models to recognise [this kind of] behaviour on the network and shut it down early.

"We do believe ultimately over time that this will help our growth story, encourage more people to stay with Twitter and also tell their friends, family and colleagues about the value they're getting out of it."

Twitter expects that its monthly active users could now continue to decline on in the third quarter.

"Based on our current level of visibility, we expect the decline to be mid-single-digit millions of monthly active users," it said.

While Twitter's strategy may have caught investors off guard, the focus on safety and transparency one that's paying off for advertisers amid growing pressure on platforms to help clean up the digital supply chain.

Unilever's top marketer Keith Weed, who recently issued a call for social networks to tackle follower fraud, is among those to have praised Twitter's recent purge, saying he was pleased to see the site "take a stand" and hoped others would follow.

Twitter's overall revenue for the quarter clocked in at $711m, up 24% year-on-year. Advertising revenue made up the bulk of that at $601m, an increase of 23% since the same period in 2017.

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