Conquering Twitter's Growing Pains

Nov 26, 2014

Article ImageImagine, for a moment, a life without Twitter. Whether you're a fan of the social networking service or not, it's hard not to agree that the tweet machine has become an indispensible platform for marketers and content providers to promote their products and connect with users. But what happens when the 140-character-or-less crowd is less than anticipated? The answer is that stockholders get nervous and pundits and prognosticators begin to analyze possible problems with the business model that could forecast future doom.

That's the reality Twitter now faces as it struggles to attract new users and increase engagement. In its recent third quarter reporting, the company posted a 7% decrease in user engagement and a slide in growth of monthly active users: growth increased 23%, but that was down from 24% posted in the second quarter of 2014 and down from 38% reported in the third quarter of 2013. Consequently, Twitter's stock price has fallen in recent weeks, and the S&P downgraded Twitter's debt to junk status, describing the company's risk as significant.

So, how did it come to this? Where did Twitter go wrong, and, more importantly, what can it do to right the ship and recruit new users?

"All social media has a maturity rate. Twitter is still maturing, so seeing a decline in user gains is not unexpected," says Peter LaMotte, senior vice president of Levick. "However, Twitter's best days are probably behind it. They were one of the few social media networks when social media was just appearing on the scene, but now they have to deal with being a mature platform at a time when people have more choices than ever to engage with their friends, work networks, and perfect strangers."

Matt Krebsbach, director of Global Public and Analyst Relations for Bazaarvoice, says the very nature of Twitter as a micro-blogging service limited to 140 characters compounds the challenge.

"Twitter doesn't excel as either a content production or consumption mechanism. Meaningful, contextualized content is generally linked to another location on the Web," says Krebsbach. "Combined with the difficulty of figuring out who to follow and how to engage in a conversation, Twitter quickly becomes a one-way communication platform. If it's too taxing to separate signal from noise and build relationships, what's left to keep users invested? Not much."

Like others, LaMotte believes Twitter's major hurdle is engaging with younger audiences, as the demographics say that the majority of Twitter users are moving out of the 18- to 29-year-old demographic.

Krebsbach notes that, at some point in their lifetimes, every social network has to confront the issue of decreasing new or active users. Facebook rose to this challenge by finding ways to offer its users additional means to stay connected-either via organic innovation or acquisition.

"Twitter, on the other hand, is basically the same service it was when it was launched. Eight years on is a long time to start adding features and capabilities that give people new reasons to keep using the service," says Krebsbach.

Dan Farkas, instructor of strategic communication at Ohio University, doesn't believe this is the beginning of the end for Twitter, which he thinks will look and act differently two years from now to stave off extinction. "As media fragments, astronomical growth rates become harder to achieve. TV isn't going to see another M*A*S*H or Seinfeld finale ratings number. That trend will eventually apply in the social space as more platforms develop," says Farkas.

To survive and thrive, however, Twitter needs to allow users to more quickly find meaningful content and start turning a profit now that it's publicly traded, Farkas says.

The moral to the story is that all technology companies, particularly those whose value requires hundreds of millions of active users, must continually innovate and offer users better experiences, says Joe DiNardo, marketing director for Blue Fountain Media. "Twitter needs to further develop its product as the conversation platform," DiNardo adds. "The hashtag is great for identifying and joining a conversation, but Twitter needs to move in a direction where the platform allows for continued conversation."