Twitter Increases Ad Frequency for Users

Twitter to Experiment with New Ad Placement in Conversation Threads

Twitter has announced plans to test a novel advertising format and its integration within the platform's user experience. Bruce Falck, Twitter’s Revenue Product Lead, revealed on Wednesday that advertisements will be displayed on mobile devices within conversation threads, specifically following the first, third, and eighth replies.

Testing and Potential Creator Revenue Sharing

While the company hasn't committed to a permanent implementation, Twitter intends to refine the ad insertion points and layouts through experimentation. Furthermore, Twitter is exploring the possibility of allowing creators to opt-in to ad display within their threads.

Should creators choose to participate, they would also be eligible to receive a portion of the generated ad revenue, according to Twitter’s statement.

The Drive for Revenue Growth

Historically, Twitter has faced challenges in achieving substantial growth in its user base. Consequently, the company has focused on maximizing revenue generation from its existing user community.

This strategy has resulted in the introduction of numerous new features over the past year, including audio chat rooms, ticketed events, creator tools, subscription options, and virtual tipping mechanisms.

Twitter aims to fulfill its commitment to investors by doubling its revenue from $3.7 billion in 2020 to $7.5 billion or more by 2023, and expanding its monetizable daily user base to 315 million.

Early Results of New Features

Despite launching several new products, Twitter has yet to experience a major breakthrough success. For instance, data suggests that the Super Follow platform for creators generated approximately $6,000 in its initial two weeks in the U.S. and Canada.

A separate analysis indicated earnings of $12,400 over 17 days in September. Regardless of the precise figures, it’s evident that demand for creator subscriptions remains limited at this time.

Twitter Blue and the Importance of Advertising

The rollout of Twitter Blue, the company’s premium subscription service, has also been delayed in key markets, including the United States.

This subscription includes an “undo” feature, offering a solution for quickly correcting typos – a functionality frequently requested by users.

However, despite these new initiatives, advertising continues to be the primary source of Twitter’s revenue.

Recent Earnings and Ad Targeting Improvements

In July, Twitter exceeded Wall Street expectations by generating $1.05 billion in ad revenue for the quarter. This success was attributed to enhancements in ad effectiveness, specifically the introduction of 2,500 new topic categories for more precise targeting.

Twitter intends to ensure that in-conversation ads are contextually relevant to the ongoing discussions.

Creator Incentives and Experimentation

“We see a significant opportunity to develop an advertising system that provides value and aligns the interests of both creators and advertisers,” stated Falck in a Twitter announcement.

“Over the coming months, we will concentrate on evaluating the performance of this format and its impact on users and conversations. We will test various frequencies, layouts, contextually relevant ads, and insertion points. Our findings will determine whether we integrate this permanently.”

He further added, “We are enthusiastic about testing this for our advertisers and exploring how it could create additional opportunities to reward Tweet authors and creators.”

Potential Impact on Twitter’s Culture

This initiative proposes a revenue-sharing model with creators whose content generates extensive threads suitable for ad placements. Viral tweets often lead users to scroll through numerous responses, potentially allowing Twitter to insert more advertisements throughout the thread.

However, monetizing viral content in this manner could influence Twitter’s content and culture, potentially favoring performative content – such as provocative statements, jokes, and emotionally charged tweets – over genuine and thoughtful discussions.

Ad-Free Options and User Feedback

An increased ad load could also prompt Twitter to offer an ad-free experience for users willing to pay a premium.

While Twitter Blue currently doesn’t include ad-blocking, many apps provide this option through paid subscriptions. This functionality could be integrated into Twitter Blue or offered as a separate purchase.

(Twitter has clarified that this is not currently under consideration.)

Historically, users have expressed dissatisfaction when Twitter increases ad frequency, particularly near the end of quarters or years.

Strong negative feedback from users or adverse effects on platform engagement could lead Twitter to reconsider this test.

The Path Forward

However, given the company’s need to boost revenue, it is more probable that this change will proceed once the optimal formula for layouts, placement, and contextual targeting is established.

Twitter’s previous attempt to launch a “stories” product failed to gain sufficient user adoption, eliminating a potential new ad placement area.

Therefore, Twitter is actively seeking alternative ways to monetize through advertising, and increasing ad placements appears to be the current strategy.