Jessica Heygate
Jul 25, 2023

How Threads can avoid unraveling

From maintaining momentum to navigating regulation and offering a brand safe environment, Meta has several hurdles to overcome to turn Threads into a sustainable revenue stream.

How Threads can avoid unraveling

While Meta’s rollout of Threads was an overnight success, the tech company now faces the challenge of maintaining momentum by balancing brands’ desires while nurturing a distinctive and engaging platform for users.

Threads made history when it launched earlier this month and reeled in 100 million users within five days — the fastest growth any app has experienced.

The opportunistic timing of Threads’ rollout and its ability to piggyback on Instagram’s existing 2 billion monthly active users worldwide gave it a significant leg up over other text-based platforms that have been vying to scoop up Twitter’s disgruntled users and advertisers.

Meta CEO Mark Zuckerberg greenlit the development of the text-based app in January — just months after Elon Musk took over Twitter, which on Monday became X, and gutted its workforce and content moderation policies.

“There was an opportunity wide open there for someone,” says Brian Wieser, principal of consultancy Madison and Wall.

Threads was initially slated to launch in late July, but its debut was pulled forward to capitalize on uproar at X after it began to impose limits on how many posts users can read. Ironically, Instagram CEO Adam Mosseri said last week Threads would similarly establish rate limits to combat rising spam attacks.

The six-month runway meant Threads launched with several basic features missing, including hashtags, direct messages and the ability to search for posts. One user described it on Friday as a “half complete clone of Twitter.”

Moreover, its lack of a chronological feed has frustrated users. While Threads was initially hailed as a haven for light-hearted chat between friends and connections, as brands flooded onto the platform the feed quickly became disorganized and “irrelevant,” according to users.

“Right now, the Threads feed is a free for all — what you follow, what you don't follow — it’s hard sometimes to make sense of the noise,” says Joshua Lowcock, global chief media officer at UM Worldwide.

Such issues have caused the initial sheen of Threads to rub off. Daily active users (DAUs) plateaued at 49 million on launch day, July 7, and have been in steady decline since. Two weeks after launch, DAUs are estimated to be down by about 70% to 13 million, according to a Wall Street Journal report citing data from Sensor Tower. Time spent on the app halved one week after launch, according to SimilarWeb.

“To maintain engagement they need to introduce unique features — they need to have a point of differentiation compared to the other platforms — and they need to get some of the basics right,” says Ali McClintock, managing director at Dept. 

Mosseri confirmed to the BBC on July 11 that improvements are in the works, including a chronological feed, the ability to edit a post, language translation, easier account switching, a desktop interface and a "more robust search function."

The feed

How Meta ultimately decides to organize Threads’ feed will have knock-on effects on the viability of its yet-to-launch advertising products, which will be critical to sustaining the app. Nearly all (98%) of Meta’s revenue comes from advertising, according to its most recent earnings, and the company needs more revenue streams to sustain its lofty metaverse and AI investments.

“[The social platforms] really do depend on constant innovation in some form. They have no moat that's permanent,” says Wieser.

If Threads’ feed skews too heavily towards brands, it risks losing users — the volume of brand content within users’ feeds is already a point of contention, and that’s before ads have been introduced.

“What was so refreshing when people first went on to Threads was that they were seeing their friends and their family — it kind of went back to the beginning of Twitter when it wasn't full of brands and adverts. Whereas now it does feel more brand-heavy and less local content heavy,” says McClintock. 

But public conversation feeds present brand safety risks. Instagram’s Mosseri has indicated that Threads will not prioritize politics or news in its feed to avoid the “scrutiny, negativity…integrity risks” that come with that content — reflecting the company’s ambition to make Threads a “positive” alternative to Twitter.

The question is, without politics and news, what will keep users engaged? Social media experts suggest Threads should prioritize content from friends and family.

“If they can get back to friends and family and get people to post more about themselves in an authentic way, I think that will be a big point of difference,” says McClintock.

This type of content is also less risky for brands.

“The challenge with an uncurated feed is that a problematic account could randomly surface or turn problematic. Whereas if it's friends and family, it makes it easier for advertisers who can then place exclusions against accounts they don't want to appear adjacent to,” says Lowcock.

Hashtags

While Meta has nearly two decades of experience building and managing social media apps, moving into a text-based conversational interface brings fresh challenges.

For instance, hashtags, which are intrinsic to how users discover content on Twitter, are a feature Meta hasn’t fully contended with.

Instagram users employ hashtags to label their content, including when their posts are sponsored, but popular hashtags do not ebb and flow in the way they can swiftly become viral on Twitter.

The speed at which hashtags trend on more transient platforms like Twitter makes them ripe for exploitation, Lowcock says.

“If you look at where Twitter has faced criticism in the past, it's from brigading, where a whole host of people post a hashtag to cause a problem or attack an individual,” he says. 

“Meta knows how to deal with people posting inappropriate comments or uploading video content or images that are unsafe — it's the trending nature of those hidden discovery moments that is fundamentally different,” he adds.

Even without hashtags, Threads has already had to contend with the spread of hate speech and extremist content. A group of 24 civil rights, digital justice and pro-democracy organizations penned a letter to Zuckerberg on July 13 criticizing the platform for not having “clear guardrails against future incitement of violence.” Meta initially told Reuters it would not extend its fact-checking program to Threads but subsequently U-turned when questioned by Australian authorities. It also said it would add labels to state-affiliated media, which were removed from X in April.

Nevertheless, advertisers have greater faith in Meta to police content than X, which has relaxed its guardrails under Musk’s vision to turn the platform into a “digital town square” that protects free speech.

“Threads is more actively moderating content and is deemed to be a more brand safe environment — even though it's not the utopia that everybody wants,” says McClintock.

“Platforms which are deemed to take it seriously and want to improve it with governments, with advertisers and with the public gain more trust from our advertisers. With Twitter saying actually, we don't want to have that discourse — that's where it becomes more of a worry for advertisers,” she adds.

The fediverse

Another new challenge for Meta will be managing the side effects of joining the so-called fediverse, which allows users to communicate across different social-media platforms.

Meta said when it launched Threads it planned to implement ActivityPub, an open, decentralized social networking protocol, to connect to other servers operated by platforms such as Mastodon.

Meta has said that its rules would still apply to users on other platforms and that it would block servers from accessing Threads if it was hosting bad actors.

But some security experts have suggested this decentralized model can make content moderation trickier because platforms have less visibility into problematic users.

"With federation, the metadata that big platforms use to tie accounts to a single actor or detect abusive behavior at scale aren't available,” Alex Stamos, the director of the Stanford Internet Observatory and former head of security at Meta, posted on Threads. “This is going to make stopping spammers, troll farms and economically driven abusers much harder."

Lowcock, on the other hand, suggests brand safety can be easier to manage in the fediverse model because it is customizable, so advertisers could opt to appear only in tightly moderated environments.

“The real question becomes: how does Meta position advertising in a world where it controls part of the feed, but not the entire feed?” Lockcock poses. “Does that create new challenges? Yes. Are they easy to manage? Yes.”

The Instagram link

While linking to Instagram gave Threads instant access to users, it came at the detriment of a global rollout, as it withheld launching in Europe where Meta is facing several probes over how it collects and transfers data between its services.

The volume of data that Threads collects about its users — everything from sexual orientation to race and ethnicity, politics and religious beliefs, health and fitness and precise location — instantly raised alarm bells among the privacy community.

The European Court of Justice recently ruled that Meta can no longer use “legitimate interest” as a reason to collect such data and must instead obtain consent from users to serve personalized ads. Furthermore, incoming EU regulations, including the Digital Services Act and Digital Markets Act, ban the use of sensitive data for advertising purposes entirely. 

Compliance in Europe may take time, but the ad industry seems confident that Meta can find a solution.

“My assumption with respect to Europe is that over the course of the next year or two, they will find some form of product adaptation that will allow them to operate there — and since it's not evident that Twitter is fixing itself anytime soon, they don’t need to be in a hurry,” says Wieser.

The staggered roll out may even prove beneficial when it comes to attracting brands, suggests McClintock. “I think people are thankful they’ve had a bit of a trial so they can get prepared before it goes live in EMEA. It feels less risky,” she says.

Ad budgets are predominantly allocated at a country level, so Threads’ Europe absence wouldn’t impact its ability to derive revenue elsewhere once it introduces ads. “Even global clients tend to only market domestically in a market,” says Lowcock.

Meta could also use the link between Threads and Instagram to tighten up rules enforcement, Lowcock suggests.

“If I was at Meta, and you want to actually change people's behavior, I would think about maybe unifying moderation, where if you make a mistake on Threads and a mistake on Instagram it's two strikes, not one strike. It might actually make people think about the consequences a little bit more,” he says.

Separating Threads from Instagram may appease regulators and users — who have expressed frustration in their inability to delete one account without losing the other — but could end up hampering its ad prospects, since advertisers crave unification.

“That separation might actually create a friction point for brands’ continued participation,” says Lowcock.

McClintock adds: “Clients really want a singular view of what's working. Simplification in that space — measurability and impact and attribution — is really valuable. And, actually, I think it hinders people going and spending on Twitter, because it's another complication.”

Source:
Campaign US

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