Twitter loses 59% of ad revenue in the US – 6/5/2023 – Market

Elon Musk recently said that Twitter ad sales were on the rise. “Almost all advertisers have come back,” he said, adding that the company could soon become profitable.

However, the company’s advertising revenue in the US between the period from April 1 to the first week of May was US$ 88 million (R$ 433.2 million). That represents a 59% year-over-year decline, according to an internal presentation obtained by the New York Times.

Twitter has consistently missed its weekly US sales projections, sometimes by as much as 30%, as reported in the filing. That performance is unlikely to improve any time soon, according to the report and seven current and former company employees.

The industry team is concerned that advertisers are possibly spooked by the rise of hate speech and pornography on the social network. Also harmful is the rise of advertisements for online gambling and marijuana products.

The internal document predicted that US ad revenue this month will be at least 56% lower each week compared to a year ago.

Those problems will soon be inherited by Linda Yaccarino, the NBCUniversal executive whom Musk named CEO of Twitter last month. She is expected to start work on Monday, according to four people familiar with the matter.

Contacted by the New York Times, Linda Yaccarino’s spokesperson declined to comment. Elon Musk did not respond until the publication of this text.

Twitter’s advertising situation is crucial because ads have long made up 90% of the company’s revenue.

After Musk bought the platform for $44 billion (R$216.6 billion) in October and took the company private, he vowed to build “the most respected ad platform”. However, he quickly alienated advertisers by firing key sales executives, spreading a conspiracy theory and getting banned Twitter users back.

In response, several major advertising agencies and brands, including General Motors and Volkswagen, stopped paying for ads on Twitter. Musk said Twitter was on track to post $3 billion (R$14.7 billion) in revenue in 2023, down from $5.1 billion (R$25.1 billion) in 2021 when it was a company. publicly traded.

Twitter’s rating has since plummeted. In March, Musk said the company was worth $20 billion, down more than 50% from the $44 billion he paid for it. Last week, mutual fund giant Fidelity, which owns shares in Twitter, valued the company at $15 billion.

Some of Twitter’s biggest advertisers — including Apple, Amazon and Disney — have spent less on the platform than they did last year, said three former and current Twitter employees.

Large, specialized ads on Twitter’s trending page, which can cost $500,000 (R$2.4 million) for 24 hours and are almost always bought by big brands to promote events, concerts or movies, are often left unoccupied, they said.

Reached by the New York Times, Disney, Apple and Amazon declined to comment.

Six ad agency executives who have worked with Twitter said their clients continued to limit spending on the platform. They cited confusion over Musk’s changes to the service, inconsistent support, and concerns about the persistent presence of misleading and toxic content on the platform.

The company is looking at ways to make it easier for advertisers to buy space, testing an automated system outside the United States to close deals, two people familiar with it said.

Adult content, which is allowed on Twitter, has become a concern among the company’s sales force. When some employees tried to pique advertisers’ interest in Mother’s Day, they discovered that potential sponsored search terms, including “MomLife”, displayed pornographic videos.

These are problems some advertisers are hoping Linda Yaccarino will solve.