Twitter says it overcounted its users over the past 3 years by as much as 1.9M

It may have encouraged the company to more seriously consider its acceptance of Musk's proposal to take the company private. The company admits that it had overstated the number of users on its service for at least 3 years due to a technical error.

In its earnings release, the company explains that it launched an account linking feature in March which allowed users with more than one account to link them together in its user interface, allowing them to switch between their different identities. The multiple accounts were clearly owned by a single person, but they were still counted as separate daily active users.

The mDAU metric was not a standard way of measuring users on the service. After struggling to show growth through measurement of monthly active users on a quarterly basis, the company came up with the idea. The mDAU metric would be used to represent users who log in to the website and applications on a daily basis, as well as those who are able to view its ads. It was noted that the metric would not be comparable to similar daily active user disclosures from other companies, as they would often use a more expansive metric that included users who were not seeing ads.

The metric was supposed to give advertisers a better idea of how many people on the micro-blogging site were eligible to be targeted. It was an important metric in terms of the health of the company since advertising continues to fuel its business.

It was wrong.

The numbers for the mDAU metric were re-ran for the past quarters where it had found it had been overcounting. It was found that it was overstating the number by as much as 1.9 million depending on the quarter. The company noted that the data was not available prior to Q4 2020 due to its data retention policies, but said its estimates suggested the prior period adjustments would not be greater than those seen in Q4 2020.

The image was posted on the social media site.

As you can see by the chart, as the user base grew, so did the overcounting, ending with an overstatement of nearly 2 million more mDAUs than the company actually had.

Meta just reported its family of applications saw over two billion users in the first quarter of 2022, and Facebook alone saw over one billion. It's more important on a service that has historically struggled with flat user growth. It had invented a new metric to hide its issues because user growth had been a thorn in its side.

Despite the adjustment, the company ended the quarter with 229 million mDAUs, up 15.9% from the same time last year and topping analyst estimates.

The company had set a goal of reaching 315 million mDAUs by the year 2023. A 20% compound annual growth rate would have been achieved from the base of 152 million mDAU. Many of its new product developments were monetizable, like Super Follow subscriptions, and the premium subscription service. It's clear that there's still a long way to go to make those investments pay off, not only in dollars and cents, but also in attracting newcomers to the network.

This is not the first time that incorrect metrics have been reported around users, but it is the first time that they have impacted the service. At a time when its MAU base was over 300 million, the company overstated its MAU by 1 to 2 million.

The error could cause more problems for advertisers. Musk has been preaching a plan to embrace a free speech policy on the social networking site, which often means a more permissive attitude towards abuse, bully and hate speech. That isn't something brands want to market themselves against.

Will advertisers flee a ‘free speech’ Twitter?

Advertisers are nervous as well.

AdAge reported that advertisers were in a state of confusion and anxiety. Agencies were reaching out to brands to help them understand and prepare for what's to come at the micro-blogging site. One agency executive said there were signals that advertisers were prepared to stop spending after Musk's takeover.

Advertisers were told that it will remain a safe place for brands after the Musk takeover. It had heard similar concerns from advertisers who are taking a wait and see approach. One group of advertisers is more worried than the other. They are worried that their marketing campaigns will leak to their rival. The CEO of Fisker, Henrik Fisker, deleted his account on the social networking site.

Advertisers know it can't keep the promise if Musk makes more radical changes. It's a wonder why a company that depends on advertising revenues would agree to a deal that puts a free speech absolutionist in charge. The growth it believed it had achieved was smaller than it thought, which is why it took the deal.