Twitter admits it inflated audience data for 3 years

Twitter admitted to having declared audience numbers with almost 2 million users more than the real ones for approximately three years.

The flaw was revealed during the company’s first-quarter earnings release on Thursday (28) and days after the social network accepted a $44 billion takeover offer made by Tesla’s chief executive. , Elon Musk.

This is the second time that Twitter has miscalculated its number of users. In 2017, the network discovered that a similar error had gone unnoticed for three years.

The latest deception was revealed just days after Twitter accepted a takeover leveraged by Musk. The businessman suggested plans to overhaul the social network’s business model, which currently relies on advertising for more than 90% of its revenue.

In light of the Musk deal, Twitter’s first-quarter earnings report provided little comment and did not include any guidance for the rest of the year. The company also suspended its usual conference call with analysts.

First-quarter revenue of $1.2 billion was slightly below Wall Street’s forecasts, which Twitter attributed to “problems associated with the war in Ukraine”.

Net revenue jumped to $513 million, thanks to the one-time benefit of the $1 billion sale of its MoPub mobile advertising unit to AppLovin.​

The number of monetizable daily active users (mDAU), its original audience tracking metric, fared better than investors had expected at 229 million, up 6.4% year-on-year in the US and 1%, 8% in the rest of the world.

Twitter also revealed what it described as a “bug” introduced in Q1 2019 that “resulted in a declared excess of mDAU” that went unnoticed for nearly three years.

The difference between the numbers that Twitter reported last year and the actual account ranged between 1.4 million and 1.9 million, according to the company, or just under 1% of the total. She hasn’t presented an adjustment for 2019 or most of 2020.

Advertisers rely on accurate audience size estimates when planning their campaigns.

“In March 2019, we launched a feature that allowed people to link multiple separate accounts to conveniently switch between accounts,” the company said. “A mistake was made at that time, so actions taken through the main account resulted in all linked accounts being counted as mDAU.”

Fake or spam accounts accounted for less than 5% of its mDAU during the quarter, Twitter said, after an internal review. Musk said he intends to attack the “bots,” or fake accounts, when he takes over.

In 2017, Twitter had to reduce its previously reported user numbers since 2014 by as much as 2 million per quarter after it discovered it had erroneously counted the activity of third-party apps as unique users.

Musk’s bankers dodged much of the due diligence usually required on these deals, people familiar with the negotiations told the Financial Times, as they scrambled to put together a $25.5 billion financing package in a few days rather than usual weeks.

Twitter shares rose about 1% to $49.05 in early trading, down from the $54.20 Musk agreed to pay for the company.

Translated by Luiz Roberto M. Gonçalves