Twitter’s users are worthless — but monetisable

Allow me to let you in on a little secret: Twitter isn’t a big user of its own product.

That’s right, while the company’s main account @twitter has 57.1-million followers, it follows just one other, which doesn’t make it a very engaged account holder. And its tweet frequency is relatively low — even I have sent more tweets than @twitter has, and I signed up two years later. US President Donald Trump has sent four times as many — 48,700 tweets since March 2019.

The other thing that’s worth noting is that most of Twitter’s users are worthless. On Thursday, Twitter reported fourth-quarter revenue that surpassed $1bn for the first time, driven in large part by a 21% increase in monetisable monthly active users (mMAU, in Twitter parlance).

This “monetisable” moniker was introduced in late 2018 and compares with an old metric it used simply called MAU. But the big result of this change is to cut its user numbers — under this definition — by more than 60%. That sounds bad. It’s not.

Twitter defines monetisable users as “people, organisations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com or Twitter applications that are able to show ads” (emphasis added). A few years ago, the company boasted about being able to serve ads to people who weren’t even Twitter users; it contended more than 500-million people visited the site without logging in.

AARPmMAU

So the upshot is that hundreds of millions of people might possibly be considered part of the Twitter audience, but Twitter itself no longer considers them “users” for the purpose of monetisation. They are, for all intents and purposes, worthless, except that makes Twitter itself more valuable to advertisers.

By assuring the real customers of Twitter (the ad buyers) that the product they’re getting (the users) is genuine, it can push up prices and increase revenue. As a result, the money it makes from each of those “valuable users” (let’s call it AARPmMAU)¹ is trending up.

Going into a US election year, this could matter. There’s bound to be a lot of noise online over the next nine months, including a lot of fake news, conspiracy theories and partisan rancour. Sure, this may drive up use and engagement, but Twitter seems to be taking the line that not all engagement is good engagement. Quality is important.

As part of this, the company has bolstered measures “to protect the integrity of election-related conversations and proactively limit the visibility of unhealthy content on Twitter”. Contrast that to Facebook, which has decided to take a hands-off approach to censorship to the point of allowing demonstrably false advertising.

If Twitter is lucky, this approach will also help bring audiences back. In its call with investors on Thursday morning, CFO Ned Segal noted that the company aims to make casual users — for example, those who haven’t been on Twitter for more than a month — return more often. I believe that this could boost monetisable monthly active users, and lure more advertisers, creating a virtuous cycle.

Twitter has already lost the size battle. At more than 2.5-billion users globally, Facebook has that trophy. But in attempting to make its platform appear more sanitised, from both a content and a user-metrics standpoint, Twitter may have a shot at becoming the platform of quality, not quantity.

Who knows, maybe even Twitter will use its own product more often.

¹ Average advertising revenue per monetisable monthly active user

• Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.