Twitter, Inc. (NYSE:$TWTR) has stated that they are taking the necessary steps to provide users with more detailed information about all advertisements made on the platform- including political and issue-based ads. Their hope is to provide more “transparency” to customers and improve user control.

Advertising Transparency Center

Within the next couple of weeks, Twitter will launch its Advertising Transparency Center, which will provide detailed information pertaining to all ads being used on the site. The information will include the duration which the ad has been running and campaigns which are associated with the ad. Users will also be able to see which ads are specifically targeting them, as well as provide feedback through comments or flagging ads which they deem to be inappropriate. The changes will initially be rolled out exclusively to the U.S., before being released globally.

Electioneering / Political Ads and Issue based Ads

Within the Transparency Center, there will be a section specifically designated to “electioneering ads”. Disclosing information concerning the total advertising spent on the campaign, the source of funding, data regarding previous ad spends, and their targeted audience. They intend to update their current policies and enforce their regulations through the use of stronger penalties for violators.

Unlike Electioneering Ads, the definition of issue-based ads has yet to be defined in the industry. Therefore, before creating transparency and enforcing policies,  Twitter must first work with “peer-companies, other industry leaders, policymakers and ad partners” to clearly define issued-based ads.  

With Twitter making such changes to their advertising policies they do run the risk of declining revenues due to lack of revenue diversity. In comparison to the industry’s 25.4% rally, Twitter shares have only gained 5.0% year-to-date.

Regulatory Threat

As a direct result of the 2016 Presidential election, Twitter, Facebook (NASDAQ:$FB) and Alphabet’s Google (NASDAQ:$GOOGL) have been placed under serious pressures and constant scrutiny of spreading extremist propaganda. Allegations of releasing fake news have led many of the public to believe that the platforms had a direct influence on election results.

Along with updating policies and crack down on violators, Twitter intends to combat the spread of extremist propaganda by suspending 935,897 accounts, all of which they believed to be linked to terrorism.

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