Twitter's Audience Has a 'No Return' Policy

By Mike Shields, Mediaweek

NEW YORK Twitter’s audience is exploding. Now if only they could get people to stick around.

Over 60 percent of people who sign up to use the popular (and tremendously discussed) micro-blogging platform do not return to using it the following month, according to new data released by Nielsen Online. In other words, Twitter currently has just a 40 percent retention rate, up from 30 percent in previous months -- indicating an “I don’t get it factor” among new users that is reminiscent of the similarly over hyped Second Life from a few years ago.

Nielsen found that Twitter’s unique user base doubled in March. But most newbies aren’t coming back. “People are signing up in droves,” wrote David Martin, vp, primary research, Nielsen Online, in a blog posting today. “But despite the hockey-stick growth chart, Twitter faces an uphill battle in making sure these flocks of new users are enticed to return to the nest.”

Martin sees this low retention rate a long-term problem for Twitter, citing growth patterns for previous Web sensations. According to Martin, a low retention rate limits how much a site can consistently grow its audience; by his calculation, a 40 percent retention rate results in just a 10 percent reach level. That limits how big a property can get over time, since there are a finite number of potential new users.

“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.”

Of course, it’s early in Twitter’s development, and the average Web user may simply need more time to understand its benefits and change his or her behavior. But Martin sees ominous signs. For one, previous Web calculations showed MySpace and Facebook had double Twitter’s retention rate at a similar growth stage, and their retention increased over time.

“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,” wrote Martin. “Frankly, if Oprah can’t accomplish that, I’m not sure who can.”

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