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Chronicles

The story behind the story

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Sources: Twitter no longer showing ads to some of its more valuable users in order to keep them engaged

Twitter Has Stopped Showing Ads to Some of Its Most Valuable Users  —  Twitter makes its money by showing ads to its users.  —  But not all of its users: For the past few months …

Re/code Peter Kafka

Context & Ripple Effects

Twitter built its business on timeline ads even as user growth disappointed, per its early revenue-model development, and had already started pushing past its own walls with a test of promoted tweets shown to logged-out users. The move reported here cuts the other way: rather than widening the ad net, Twitter is narrowing it, deliberately withholding ads from some of its most valuable users to keep them engaged.

That trade-off — protecting the people who make the product worth using at the cost of sellable impressions — is the tension that defines Twitter's monetization story, and it sets up the reversals that follow in the coverage.

First-order effects

  • Some of Twitter's most influential users see cleaner timelines right now, while advertisers lose access to exactly the audience their campaigns are presumably priced to reach.

Second-order effects

  • With prime inventory withheld, Twitter leans harder on the supply it was already building outside its core timelines — the logged-out and off-platform ad products tested in late 2015 — to keep revenue growth intact.
  • The suppression proves temporary: within weeks some verified users notice promoted ads returning to their timelines (the February 2016 reversal), showing the policy couldn't survive contact with Wall Street expectations.

Third-order effects

The trend: Twitter's decade-long arc runs from rationing ads to protect engagement, to maximizing ad load to satisfy revenue targets, to watching its biggest advertisers leave — the engagement-versus-monetization trade resolving, each time, toward monetization.