Twitter Begs Users to Target Themselves for Ads
Twitter Begs Users to Target Themselves for Ads
Scott Duke Kominers December 30, 2019
As I've written before, Twitter faces a fundamental problem in
leveraging its user data. Because the platform encourages brief and
superficial interactions, it’s hard for the company to evaluate content
quality, much less learn about specific users’ preferences and interests.
That’s bad for Twitter's top line, which depends on ad sales. If the
company’s doesn’t know what you like, it has trouble inferring which forms of
advertising you’re most likely to engage with -- and that means that the
opportunity to advertise on the platform isn’t worth that much.
That’s where Twitter is hoping that Topics will help: Before
Topics, Twitter couldn’t tell an advertiser with certainty whether you like a
given subject. Now, if you subscribe to the relevant Topic, then the platform
can at least claim it knows you’re interested.
Twitter is quite transparent about this, explaining that when
you follow a Topic, “You’ll see Tweets, people, events and ads” about it. And
many of the Topics that are available for now are tied to specific ad
categories.
I appreciate and almost admire the company’s audacity in
explicitly asking users to indicate which ads to show. But at the same time,
the need to do this exposes the true conundrum of Twitter’s current model. We
all knew that Twitter’s ad matching was bad, but who knew it was so bad that the
company would have to beg users to help target themselves?(1)
And there’s a deeper problem with Topics: Twitter’s fundamental
inability to evaluate content makes it hard to curate feeds, and as a result
the available Topics – at least so far – seem pretty unfiltered and low
quality. The "Star Wars" Topic, for example, is full of "Rise of
Skywalker" spoilers and rants. The “Video Games” Topic shows a bunch of
random people’s Pokémon Go screenshots, plus a large number of holiday posts from
a single game producer -- presumably the one that has bought the most ads (and
may have even paid for the privilege of being featured above its competitors).
As a result, users don't have much incentive to seek out Topics
directly. Making the problem worse, Twitter’s inability to target content
applies to Topics as well. (For example, the platform keeps asking me if I
want to subscribe to the “Astrology” Topic. (3)Presumably that's because I
periodically tweet about Libra – but when I do so, I'm talking about the blockchain
technology, not the zodiac sign!)(6)
Twitter has also made a seemingly unforced implementation error:
the list of Topics you subscribe to is public, just like the list of profiles
you follow. That's counterproductive because you might have interests -- ad-relevant
ones -- that you'd be happy to note in private but wouldn't necessarily want to
broadcast in public. ("Bad '80s music," anyone?)
Twitter had more than $3 billion in revenue last year, most of
it from ads, so it’s hardly a basket case. But at the same time, its ad
business has been struggling, with some commentators predicting a bleak outlook
for 2020. What's more, almost two-thirds of Wall Street research analysts have
"hold" ratings on Twitter’s shares -- not exactly a vote of confidence
in the company's prospects.
I’d like to see Twitter find ways to move beyond an ad-based
business model. But if the company really wants to make selling ads work in the
long run, it has to encourage more meaningful user experiences from which
it can infer more valuable data. That probably means doing a better job of
curating content and encouraging more private interactions on the
platform. Topics, at least in its current incarnation, doesn't seem like the
solution.
(1) At some level, this is really stunning. I would have
thought, for example, that users' on-platform search behavior would be enough
to reveal the same amount of information -- anything a user searches for more
than a couple times is probably a true interest. But maybe average Twitter
users search sparingly, preferring instead just to scroll through endless
feeds?
(2) For what it's worth, knowing who subscribes to
"Astrology" might indeed be high-value for advertisers.
(3) I am an economic adviser to Calibra Inc., a subsidiary of
Facebook Inc. that is one of the founding members of the Libra Association.
Scott Duke Kominers is the MBA Class of 1960 Associate Professor
of Business Administration at Harvard Business School, and a faculty affiliate
of the Harvard Department of Economics. Previously, he was a junior fellow at
the Harvard Society of Fellows and the inaugural research scholar at the Becker
Friedman Institute for Research in Economics at the University of Chicago.
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