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Data released from Nielsen Online, which analyzes online media and its audiences, shows the popular social networking site Twitter is struggling with low retention rates: More than 60 percent of Twitter users fail to return the following month.
David Martin, Nielsen Online’s vice president of primary research, wrote a blog post noting that, while celebrity endorsements from the likes of Oprah Winfrey or the rants from commentators like John Stewart pushed Twitter’s recognition into a far brighter spotlight, Twitter faces an uphill battle in making sure the flood of recently acquired new users are enticed to stay with the site.
Twitter, based in San Francisco, is a free social networking and micro-blogging service that allows users to send and read other users’ updates, which are called tweets-posts of up to 140 characters in length. Users create an account that others can follow and, theoretically, find other “twitterers” they want to follow.
“Twitter’s audience retention rate, or the percentage of a given month’s users who come back the following month, is currently about 40 percent,” Martin explained “For most of the past 12 months, pre-Oprah, Twitter has languished below 30 percent retention.”
Martin pointed out that by plotting the minimum retention rates for different Internet audience sizes, it becomes clear that a retention rate of 40 percent will limit a site’s growth to about 10 percent reach. “To be clear, a high retention rate doesn’t guarantee a massive audience, but it is a prerequisite,” he wrote. “There simply aren’t enough new users to make up for defecting ones after a certain point.”
However, Martin wrote that low retention rates do not mean that the Twitter craze is going away any time soon, as sad as that may sound to some. “We found that even when Facebook and MySpace were emerging networks like Twitter is now, their retention rates were twice as high,” he wrote. “When they went through their explosive growth phases, that retention only went up, and both sit at nearly 70 percent today.”
For the small business community, social networking sites like Facebook, MySpace and even Twitter hold potential opportunities for growth. In addition, they provide an easily accessible, rapidly deployable channel to their customer base. But as any small business owner can attest, keeping customers is hard enough to do in the real world.
Any small business thinking about investing time and energy into a Twitter account or Facebook page (or a blog) needs to have the dedication to provide constant, personalized information. Adding to that, as Martin points out, is Twitter’s struggle to improve the long-term interest its audience has in the concept.
“Twitter has enjoyed a nice ride over the last few months, but it will not be able to sustain its meteoric rise without establishing a higher level of user loyalty,” Martin concluded. “Frankly, if Oprah can’t accomplish that, I’m not sure who can.”