Why 'The Donald' Won't Save Twitter
Upon the inauguration of Donald Trump as the 45th President of the United States, many of the major media outlets globally commented on the potential of Trump as the saving grace of Twitter.
Admittedly, this post flies somewhat in the face of Twitter's most recent report on user acquisition growth in Q1 of 2017, especially considering that Business Insider reports of "Twitter COO Anthony Noto said that the company benefited from "resurrected users" following "more political accounts in Q1". There is method in the madness though.
Rightly or wrongly, Trump is entertaining - at times it genuinely feels like he's actively trying to give his Press Secretary, Sean Spicer, a panic induced heart attack. His love of Twitter as a broadcasting platform was the main reason for the aforementioned speculation, the theory being that Twitter would be saved through new users joining and engaging with the platform to keep abreast of Trump's very public brain farts.
Months down the line we wanted to revisit the conversation and with the aid of hindsight discuss how Trump won't necessarily be the saving grace for the platform - here's what the current Twitter data shows.
Users are increasing but ad revenue is decreasing
Social media networks are businesses, and while they generally have the leeway to post continual losses due to heavy investment, their funding relies on the future of the platform as a business that can monetize their popularity.
While Twitter may have increased their user base in Q1 this year - which may, in part, be due to Trump - their revenue data shows that advertisers are not following. At least not yet:
Too early to tell? Potentially. Generally, this is cyclical - more users leads to advertiser growth, while negative sentiment drives ad spend down. As such, with continued user growth we might see increased ad spend in the next quarter. Time will tell.
growth? (lower case 'g')
In their Q1 2017 report Twitter exceeded expectations by adding 9 million users to the network compared with the forecasted 2.3 million.
Let's look at that in comparison to the other big players:
Q1 User Growth
Facebook: +76 million monthly active users
Instagram: +75 million users (+100 million between 15 Dec 2016 and 26 April 2017)
Snapchat: +7 million (which was considered very disappointing and resulted in a 24% slump in share prices)
Nine million additional users is nothing to turn your nose up at, but if you want to be playing in the big leagues, those growth numbers need to be bigger. Like 5-10x bigger.
Snapchat lagged behind Twitter, but they're experiencing their own issues with Facebook's clear vendetta against them. Trump may have caused an uptick in user growth for Twitter, but according to the Q1 figures, that audience expansion hasn't been as significant as some may have projected or hoped for.
You don't need to be on Twitter to follow Trump
This is potentially the most significant reason why Trump will not save Twitter: His gaffes on Twitter do not remain siloed on the platform - if they did this would significantly strengthen the opposing argument.
Fuelled by his position as the most powerful man on the planet, any mistake (ref: 'covfefe') or clear blunder (ref:Qatar) immediately escapes Twitter and is broadcast globally via any media outlet possible. Trump's tweets feature on news websites, blogs, TV, radio and other social networks. Hell, I wouldn't be surprised if carrier pigeons are being used to relay some of them!
You can argue that this simply increases the exposure for Twitter and will fuel growth - and maybe Twitter's Q2 figures will prove this - but more likely, people realize that they don't actually need to have a Twitter account to be kept abreast of his most eye-opening tweets. The journalists and general public deliver them straight to your front door, they're near impossible to avoid, thus negating the need to necessarily sign up for a Twitter account.
Having said all that, Twitter has still posted growth - which is likely a result of their advancing machine learning measures, with the increased attention because of Trump thrown in. For a business that has never made a profit and has a share price that has only gone one way since 2014 (down if you're guessing) Twitter's remarkably tenacious, and still shows signs of potential amidst ever-mounting challenges.
Is there a viable future for Twitter? Only time will tell, but it's their own innovation that will be their savior in any event, not President Trump.
Follow Simon Ensor on Twitter