Twitter’s Technical Issues Will Likely Send Remaining Advertisers Packing

Twitter has a lot of problems and not enough people to fix them.

Since Elon Musk took over the social media company in late October, the size of its workforce has shrunk dramatically — half have been laid off, the majority of its executives and contractors have been cut, and thousands reportedly left after the new owner’s Twitter 2.0 email

With this leaner structure, the platform is likely to see an uptick in technical issues coming from the buildup of small breakdowns and outages as people assigned to tend to these smaller problems have likely already been laid off or were not too “hardcore” to stay.

READ: Twitter Vs. Employees: How Elon Musk’s HR Style Has Been So Far

The smaller breakdowns though aren’t really small. Some concerning issues reported recently include the platform’s automated copyright takedown system which seems to have stopped working, buggy logins with SSOs and 2FAs not functioning as they should, and others have also reported problems with downloading their data.

But if consumers are having issues, it’s much worse for advertisers.

Many advertisers have already paused their campaigns early into Musk’s takeover (something Musk blamed on “activists”). More left after Musk reinstated former president Donald Trump. Those who stayed are being warned by media buyers that Twitter is a “high risk” media buy, while some have started telling their horror stories. 

This anonymous marketer described problems with ad performance, saying that engagement dropped significantly, possibly due to a shift in user behavior, or the way the ads are served. Related to that, the marketer also pointed out “serious brand safety issues” after their ads were run alongside “awful content.”

Moreover, because of the mass layoffs and departures, marketers are left in account management limbo, a concern especially troubling as ads UI also seem to be broken with paused campaigns reactivating on their own, wasting away ad budgets.

According to the Wall Street Journal, pre-Musk Twitter had a net debt of about $596.5 million. After his acquisition, that ballooned to $13 billion — which means that the company will need to pay over $1 billion in interest annually. It’s also not as if Twitter was profitable before he acquired it. It was not, and in 2021, it relied on advertising for about 90% of its revenue.

With ad revenue significantly reduced, the company expects to recoup some of the losses with the Twitter Blue subscription of $7.99 per month, which will relaunch on November 29. However, the subscription model isn’t likely to give Twitter much in terms of revenue — not a lot of people would want a vanity badge that tells people it’s … a vanity badge

So, unless the new billionaire owner is hiding something fundamentally life-changing up his sleeve, it’s going to be a very dark and difficult road ahead.

Information for this briefing was found via Axios, the Wall Street Journal, Twitter, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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