ter’s U.S. advertising revenue falls 59%
Linda Yaccarino became Twitter’s CEO today. She has a lot of work to do. According to a presentation The New York Times acquired, Twitter’s revenue from advertising has dropped 59% in the past year.
Elon Musk has recently expressed optimism regarding Twitter’s advertising, saying that “almost every advertiser is back” and predicting profitability. However, the current situation is still uncertain.
There’s something wrong. Twitter’s U.S. ad revenue for the five-week period from April 1 through the first week in May was $88,000,000. The Times reported that Twitter often fell short of their weekly sales predictions, sometimes by up to 30%.
Why advertisers are leaving. Concerns were raised by the increase in online gambling, marijuana, and hate speech, as well as an increase in explicit content and advertisements.
According to an internal document, Twitter’s U.S. advertising revenue is expected to fall by at least 56% every week in comparison to the previous year.
Twitter’s advertising is critical to its success, generating 90% of the company’s revenue.
Musk promised to make Twitter the “most respected ad-platform” when he bought it for $44 billion and privatized it in October. However, he soon damaged relationships with advertisers, by firing key sales executives and promoting conspiracy theories on the platform.
Brands’ reactions A number of major brands and ad agencies, including General Motors and Volkswagen suspended their Twitter advertising investments. Musk predicted that Twitter revenue in 2023 would be $3 billion. This is a decrease from $5.1 billion when Twitter became a publicly traded company.
Three former and current Twitter staffers claim that several of Twitter’s largest advertisers, including Apple, Amazon and Disney have reduced their expenditure on the platform in comparison to the prior year. Three former and current Twitter employees also reported that large brands are not selling high-value banner advertisements on Twitter’s trend page.
Twitter has had issues with public relations, particularly when it comes to Disney. Twitter gave an unaffiliated @DisneyJuniorUK account a gold checkmark in April, which indicated that the account was a paying advertiser. The account posted offensive material. Disney demanded an explanation from Twitter and assurances that such errors would not happen again.
Why we care. Twitter, despite its challenges, is still an effective platform that reaches out to a large, global audience. It still has millions of users who interact daily. This platform offers unique opportunities for brands to be visible and interacted with.
The changes are beginning. Yaccarino is the NBCUniversal executive who was recently appointed by Musk as Twitter’s new CEO. She inherits several challenges. She took over as CEO today, BBC reported.
Has the damage been done? A new leadership team under Yaccarino may signal changes to their approach towards problematic content and improve the advertising environment. Twitter has also hired Joe Benarroch who was formerly NBCUniversal’s senior vice-president of advertising, communications and partnerships.
Advertisers need to keep an eye on Twitter’s evolution, as the social media platform could continue to play a key role in digital marketing.
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