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The story behind the story

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Twitter says some users will start seeing more ads after it changed its historical approach of showing fewer ads to users with high follower counts

- Twitter's third-quarter earnings were marred by issues in a product that advertisers use to market mobile apps.

CNBC Megan Graham

Context & Ripple Effects

Twitter's ad business has long been squeezed between Wall Street and its most valuable users: in 2016, sources reported the company was deliberately shielding high-follower users from ads to keep them engaged, even as revenue forecasts fell well short of analyst estimates and advertising revenue later declined 8% year over year. The playbook since 2015 has been expansion — selling ads outside of Twitter and turning to TV spots — rather than squeezing more out of the core feed.

That changes now: with third-quarter earnings marred by problems in the mobile app promotion product advertisers use, Twitter is abandoning the ad-free treatment for influential users and putting more ads in front of them.

First-order effects

  • High-follower users — the accounts whose engagement Twitter previously protected — will see more ads in their timelines, directly trading their experience for ad inventory.
  • Advertisers relying on Twitter's mobile app promotion product face a disrupted channel during the quarter when Twitter needs that spend most.

Second-order effects

  • The move pressures rivals like Facebook and Instagram, which never offered ad-light treatment, by narrowing Twitter's differentiation for celebrity and influencer users — and risks pushing those users' attention toward platforms that still protect the feed experience.
  • With the core feed now monetized harder, Twitter's earlier off-platform and TV expansion becomes more important as a growth lever, shifting internal investment toward formats that don't tax the core product.

Third-order effects

  • If engagement of high-value users erodes, the pattern points toward a structural ceiling: platforms that exhaust their most loyal users for ad revenue end up competing on inventory volume rather than audience quality — the same dynamic that has kept Twitter's ad business small relative to peers.
  • The reversal also signals that 'protect the user experience' policies at ad-funded platforms are contingent, not principled — they survive only while user growth covers revenue targets, and get reversed the moment it doesn't.

The trend: Ad-funded platforms are progressively monetizing their most valuable users as user growth stalls, converting engagement-protection policies into ad inventory.

Discussion

  • @willoremus Will Oremus on x
    Have you been seeing *way* more ads on Twitter in the last couple weeks? If so, then congratulations on your high follower count. And condolences on it no longer saving you from seeing the same ads as everybody else. I wrote about what happened: https://onezero.medium.com/...
  • @willoremus Will Oremus on x
    Since late 2015, Twitter users with lots of followers have seen few to no ads. With the company facing a tough ad sales quarter, that finally changed. https://onezero.medium.com/... https://twitter.com/...
  • @ejacqui Jacqui Cheng on x
    I guess I thought this was widespread knowledge (or rather, that more popular users did not get ads previously), but yeah. Never should've done that in the first place cuz it's hard to put that one back in the box. https://twitter.com/...
  • @gigastacey Stacey Higginbotham on x
    Whoa! This explains why I've suddenly seen an ad for every half dozen tweets lately after almost never seeing them. It is a really crappy experience, especially since the ads are so often for outbrain-style content. https://twitter.com/...
  • @darth @darth on x
    i think instagram used to do this as well? https://twitter.com/...
  • @chillmage @chillmage on x
    we can now quantify how much of a loser your boyfriend is https://twitter.com/...
  • @kimzetter Kim Zetter on x
    The increase in @twitter ads is finally explained - if you're seeing an uptick in ads, Twitter has decided you're no longer a very special tweeter. https://onezero.medium.com/...
  • @alexeheath Alex Heath on x
    Such a strange policy to begin with. I guess you may curry favor with your most popular accounts by not showing them ads, but don't advertisers want to reach those kinds of accounts the most? https://twitter.com/...
  • @kadhimshubber Kadhim on x
    Twitter operated a business model where popular people paid less than normies https://twitter.com/...
  • @byrdinator Haley Byrd on x
    wait. you're telling me the normal twitter experience all along has been tweet ad tweet tweet ad tweet ad https://twitter.com/...
  • @stevekovach Steve Kovach on x
    Twitter PR: “Historically, users with high follower counts have seen fewer ads. Recently, we've shifted our approach to showing ads to everyone who uses Twitter and as a result, some will notice an increase in the number of ads they're seeing.”
  • @bopinion @bopinion on x
    What does it say about the quality of Twitter's advertising — and the internet surveillance economy in general — that ending privacy-violating settings dented Twitter's ad sales? https://www.bloomberg.com/... https://twitter.com/...
  • @timobrien Tim O'Brien on x
    “Essentially, Twitter said it took a financial hit because it stopped abusing people's personal privacy choices.” - @shiraovide https://www.bloomberg.com/...
  • @twitterir @twitterir on x
    Q3 revenue was $824M, +9%, reflecting Sep strength in US, as well as headwinds incl rev product issues and greater-than-expected advertising seasonality in Jul/Aug. Op income of $44M reflects lower-than-expected revenue + no significant changes to our ongoing investments. $TWTR
  • @reuters @reuters on x
    Twitter posts worse-than-expected third-quarter revenue and profit because of advertising problems including product bugs and low demand over the summer https://www.reuters.com/... $TWTR https://twitter.com/...
  • @gcluley Graham Cluley on x
    I'll say it again. I would pay Twitter an annual subscription if they gave me an ad-free feed. (I'd pay even more if they kicked off the likes of Piers Morgan and Katie Hopkins.) They'd earn much more out of me this way than through ads. https://twitter.com/...
  • @tomgara Tom Gara on x
    Holy shit, twitter has been this awful for everyone else all this time? https://twitter.com/...
  • @stevekovach Steve Kovach on x
    Have you noticed more ads on Twitter recently? That was by design. Twitter turned on the money fountain. https://twitter.com/...
  • @shiraovide Shira Ovide on x
    Twitter stopped ignoring users' expressly stated privacy preferences, and it hurt revenue growth by several percentage points. This is discouraging both about the state of the internet ad economy, and Twitter's financial transparency. https://www.bloomberg.com/...
  • @twitterir @twitterir on x
    Total ad revenue was $702M, up 8%. In Q3, we discovered, and took steps to remediate, bugs that primarily affected our legacy Mobile Application Promotion (MAP) product, impacting our ability to target ads and share data with measurement and ad partners. $TWTR
  • @twitterir @twitterir on x
    Cost per ad engagement (CPE) was down 12%, reflecting a mix shift from MAP to video ad formats (which have lower CPEs) and like-for-like price decreases across most ad formats. $TWTR
  • @twitterir @twitterir on x
    We ended Q3 with >4,600 employees, up 21%. We now expect FY19 headcount growth to be slightly above 20%. SBC grew 8% to $99M and was approximately 12% of total revenue compared to 11% in the prior quarter. $TWTR
  • @twitterir @twitterir on x
    We announced a partnership w/ NBC Olympics in the US to amplify their vast coverage of the 2020 Tokyo Games via a live daily, original program (AM); a daily poll that lets fans choose one live look-in to broadcasts (PM); and short form video highlights throughout the day. $TWTR p…
  • @craigsilverman Craig Silverman on x
    Twitter has steadily been increasingly its ad load, resulting in more low quality ads showing up in people's feeds. After this earnings miss, that trend will probably accelerate. https://www.cnbc.com/...
  • @carnage4life Dare Obasanjo on x
    In case you were wondering why you now see more ads on Twitter, their Q3 numbers are out and they missed revenue estimates by $50M. Stock down 15-20% in pre-market trading. 📉 On a positive note daily active users up 17% year over year. 🚀 https://techcrunch.com/...