New estimates show that despite huge discounts and the promise of better control with new safety tools, Twitter’s advertising revenue has continued to fall. And the main culprit for the resistance, according to advertisers, is how new owner Elon Musk has been behaving on the platform.
Pre-Musk era Twitter historically earned more than 85% of its annual revenue from advertising. According to estimates from Pathmatics as reported by Bloomberg, the platform’s top 10 advertisers spent $71 million on ads from September to October last year.
Fast forward to the present day, Pathmatics estimates the same figure to only be around $7.6 million in the past two months, which marks an 89% fall from the final two months before Musk took control. It was reported in January that over 500 of Twitter’s advertisers have suspended spending on the platform since late October last year, resulting in a 50% drop in revenue, according to Musk.
According to the research firm, major advertisers such as Mondelez International Inc., Coca-Cola Co., Merck & Co. Hilton Worldwide Holdings Inc., and AT&T Inc., had not resumed spending as of February. While top media agencies IPG and Horizon Media have not given their clients the green light to advertise on the platform after advising against it when Musk took over.
Almost half a year into Twitter 2.0, the platform has yet to emerge from a state of chaos. It remains infested with bots and hate speech. In late March, the company’s source code was leaked online. Last week, Musk backtracked on the highly-criticized plan to strip legacy-verified accounts of their badges unless they pay for a subscription.
Musk, whose personal brand is now tightly intertwined with Twitter’s, has continued to use it as his personal gratification tool, even forcing users to see more of his tweets after noticing his reach decline. It’s become a podium for his political leanings and a broadcast channel for his meltdowns.
“It’s this intangible wild card,” an unnamed media buyer spoke about Musk to Bloomberg. “We need to work with clients to understand from a values perspective: Is this a partner you want to be in business with?”
Information for this briefing was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.