X, the social media platform formerly known (and still is to many) as Twitter, has been bending over backwards to improve its revenue stream in an attempt to plug the losses it is taking in since Elon Musk took over. X Corp., the platform’s parent firm is making changes to its verification process, informing advertisers that, effective August 7, brand accounts will lose their verification, symbolized by the coveted gold check mark, if they fail to meet certain spending thresholds.
Advertisers must spend at least $1,000 on ads in the preceding 30 days or a minimum of $6,000 on ads in the previous 180 days to retain their verified status, as reported by The Wall Street Journal.
Recently, Musk unveiled and implemented his plan to change the platform’s logo from the iconic blue bird to a simple “X.” This move comes almost 10 months since he said that his $44 billion acquisition of Twitter is the “accelerant to creating X, the everything app.”
The company has also launched an appealing initiative this week by introducing reduced pricing for video ads that accompany a list of trending topics in X’s “Explore” tab. These video ads offer brands prominent placement on the list of trending topics for 24 hours, ensuring increased visibility during crucial moments on Twitter, such as during events like the Women’s World Cup. As part of this offering, the company is extending a generous 50% discount on any new bookings of these ads until July 31.
X Corp.’s goal with these discounts is to help advertisers maximize their reach and impact on the platform during significant events and trending discussions. By providing such lucrative opportunities, the company hopes to entice brands back to the platform and demonstrate its commitment to supporting advertisers in achieving their marketing objectives.
The platform’s CEO, Linda Yaccarino, later posted the plans for X, on its way to becoming Musk’s ambitious “everything app.” She that more than being the global town square, the platform will become “the future state of unlimited interactivity.”
The appointment of Yaccarino, former ad chief at Comcast’s NBCUniversal, signaled a focus on improving ad sales while also working on increasing subscription revenue. She has informed investors of the company’s plans to concentrate on video, creator and commerce partnerships. Additionally, Twitter is engaging in preliminary discussions with political and entertainment figures, payment services, and news and media publishers.
However, Musk’s decision to rebrand Twitter as X could potentially lead to more legal woes for the platform, as several companies, including Meta and Microsoft, hold existing intellectual property rights to the new single-letter brand name.
Threads owner Meta owns the trademark to a stylized version of the letter “X” for “online social networking services… social networking services in the fields of entertainment, gaming and application development…” But, they only own the trademark for “X” where the left side is white and the right side is blue.
Microsoft, on the other hand, owns the trademark of the letter “X” itself, but only for video game-related entertainment services.
Musk himself recently revealed that Twitter’s cashflow remains in the negative territory due to a significant drop of nearly 50% in advertising revenue and the burden of heavy debt. His statement falls short of his earlier expectation in March, where he anticipated Twitter to achieve positive cashflow by June.
In response to suggestions on recapitalization, Musk tweeted, “[We] need to reach positive cashflow before we have the luxury of anything else.”
He further mentioned that Twitter did not witness the anticipated increase in advertising revenue during June but expressed a more optimistic outlook for July. Additionally, Musk pointed out that Twitter Spaces, the audio-based feature, has yet to generate any revenue and currently operates at a cost.
The timeframe for the mentioned 50% drop in ad revenue remains unclear. Musk previously mentioned that Twitter was expected to generate $3 billion in revenue for 2023, down from $5.1 billion in 2021.
Twitter has faced criticism for lax content moderation, resulting in the departure of several advertisers who were concerned about their ads appearing alongside inappropriate content.
Information for this story was found via The Wall Street Journal and the sources 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.
