Microblogging platform, Twitter has had the last 12 months reshape its identity, with the most spectacular one the Elon Musk takeover. The purchase of the Social Media giant by the Tesla henchman came with its upsides and downsides: the resignation and firing of some of its vital employees, the introduction of subscription based Twitter blue among others.
The platform since its change in leadership has now recorded drastic drop in its advertising revenue if figures are to go by.
According to a research compiled by Pathmatics, advertising revenue took a big hit with Twitter losing fourteen out of 30 of its top advertisers since Musk took charge on the 27th of October. Four advertisers were said to have reduced spending by about 98.7% from the week Musk completed the takeover to the end of the year.
The research firm further stated that the overall spending by the top 30 companies fell to an estimated $53.8 million for the months of November and December combined, indicating a 42% drop despite an increase in spending by six of them.
Pathmatics, who did its research for Reuters based its estimates on ads tracking technologies on desktop browsers and the Twitter app and had posited that earlier unreported Twitter ads were estimates that do not account for personalized deals between Twitter and advertisers or promoted trends.
Elon Musk on November 2022 while addressing the issue of company pausing ads on Twitter Spaces said “he understands if advertisers want to give it a minute”.
He also added that “the best way to see how things are evolving (at twitter) is just to use Twitter.
The Information, a tech-focused magazine while using details shared by a top Twitter advertising executive at a staff meeting on Wednesday, January 18, surmised that Twitter fourth quarter revenue fell by 35% as a result of a drop in advertising.
Twitter itself announced a loss of $270 million for April, May, June 2022.
The Pathmatics estimates is an indication of a continued disruption in Twitter’s main revenue stream heading into 2023, led by a pullback from top consumer brands.
Forward bookings, or agreements to lock in future ads, were also down for January and February, according to
Research firm, Standard Media Index had noted that in January and February, forward bookings, or agreements locked in future ads were down, but fell short of giving details on the cause.
The social media giant is now taking the initiative to plug the loss of ad revenue and had so far introduced certain measures to regain lost advertisers such as lifting bans on political ads, giving company greater control over positioning of ads and even free ads.
Molly Lopez, owner of ad agency HITE Digital Miami said, “They’re frankly really amazing incentives. Honestly, I’ve not seen that type of incentive ever from any advertiser “
While Mark DiMassimo, founder of DiMassimo Goldstein a New York ad agency said that the “bargain basement” direct marketers and political action committees – big spenders on Meta Platform Inc’s Facebook – may fill the advertising gap.
Companies like Coca-Cola Co spent just $38,000 on ads in December a major decline from estimated $1.1 million early November, Pathmatics found.
HBO spokesperson Chris Willard while not commenting on specifics of advertising spending said “we will be assessing the platform under its new leadership and determine appropriate next steps.”
According to Pathmatics, consumer brands like Kraft Heinz Co makers of Heinze Ketchup and Nestle SA manufacturers of Stouffers meal stopped all advertising and declined to comment.
Target Corp and other mass retailers like department store operator Kohls Corp did not advertise on Twitter for black Friday, and didn’t return any comment either.
Companies like Apple Inc and PepsiCo Inc however increased advertising.
But the findings are not without controversies as SmartAsset, a financial technology provider described as inaccurate the estimates made by Pathmatics, averring that the figures were inflated. The firm however failed to give in-depth details of its claims.
Pathmatics on its part fired back and said “reiterated that its figures are just estimates.”
Brand safety may have been put into question by companies with the Musk’s takeover as the drop in ad revenue in September after a Reuters report showed promoted tweets soliciting child pornography et al.
The estimates indicated that majority of the companies halted spending in November, coincidentally the same month that Musk restored suspended accounts and revamped “Twitter Blue’, a paid account verification that resulted in scammers impersonating corporations.
Telecommunications Company, AT&T Inc and pet food provider Mars Inc due to concerns about brand safety also slashed spending in September 2022.
While giving reasons for its September pause in advertising, AT&T said it arrived at its decision as a result of “concerns around content appearing next” to its ads. According to close sources, the company had spoken to Twitter about its concerns.
Pathmatics had reported that the companies who pulled out ads on Twitter, maintained and in some cases boosted advertising on rival platforms like Meta’s Facebook and Instagram platform, and also on short video app TikTok.
Will Twitter bounce back in 2023 with an upsurge in ad revenue?
Article sourced from Reuters.