The New York Times has reported a 59 percent dip in Twitter’s advertising revenue for a five-week period from April 1st to early May, in comparison to the corresponding duration in the previous year. Despite the appointment of new CEO Linda Yaccarino, the company continues to consistently underperform sales estimates with no sign of imminent improvement, as indicated by Twitter employees and internal documents seen by The New York Times.
Earlier, Musk had projected Twitter’s 2023 revenue to be around $3 billion, a sharp fall from the $5.1 billion in 2021. In March, he evaluated Twitter’s worth to be $20 billion, considerably less than the $44 billion acquisition cost.
During a recent Twitter Space discussion, Musk claimed that “half our advertising” vanished due to the “extreme pressure” exerted by advertisers from Europe and North America, even alleging that they were intending to bankrupt Twitter.
Twitter’s ad sales team, however, expresses concerns that the surge in hate speech and pornography, coupled with an excess of ads for products such as online gambling and marijuana, have deterred advertisers. Since Musk’s takeover, controversial decisions like the dismissal of crucial sales executives and reinstatement of banned users have led to brands like GM and Volkswagen halting their ad expenditure.
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According to Twitter employees, other advertisers such as Apple, Amazon, and Disney have reportedly cut back on their advertising spend compared to the previous year. The New York Times highlighted an example of high-cost large banner ads remaining unsold. Half a dozen agencies reported that their clients have curtailed their ad spend on Twitter due to inconsistent support, changes causing confusion, and the prevalence of misinformation and harmful content.
Advertisers are also worried about Musk’s controversial tweets, one of which likened billionaire George Soros, often targeted by antisemites, to the villain Magneto from X-Men comics. In a blow to the company, Ella Irwin, Twitter’s head of safety and content moderation, resigned this month, following the departure of her predecessor, Yoel Roth, in November 2022.
However, it’s not all gloomy. According to the report, several large media buyers have recently recommended their clients to resume advertising on Twitter. Musk has stated that the newly appointed CEO, Linda Yaccarino, will concentrate primarily on business operations while he will focus on product design and new technology. Her appointment might also aid in mending the strained relationships with advertisers and addressing issues surrounding moderation for hate speech, pornography, and more.
A media executive told The New York Times, “For a period, we weren’t even sure who to get on the phone with to talk to,” implying that Yaccarino’s arrival might bring a significant change. However, he also acknowledged the enormity of the task Yaccarino might face in managing the unpredictable environment Musk has established.
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Frequently Asked Questions (FAQs) about Twitter’s Advertising Revenue Decline
What percentage has Twitter’s advertising revenue reportedly dropped by from the previous year?
Twitter’s advertising revenue has reportedly dropped by 59 percent from the same period last year.
Who is the new CEO of Twitter?
The new CEO of Twitter is Linda Yaccarino.
What reasons have been suggested for Twitter’s advertising revenue decline?
The reasons suggested include extreme pressure from European and North American advertisers, a rise in hate speech and pornography, and an excess of ads for products such as online gambling and marijuana.
What major changes have been made since Elon Musk took over Twitter?
Since Elon Musk took over Twitter, there have been some controversial decisions, including firing key sales executives and reinstating banned users.
What concerns do advertisers have about Twitter?
Advertisers are worried about an increase in hate speech and pornography on Twitter, a surplus of ads for items like online gambling and marijuana, and some of Musk’s controversial tweets.
Have any high-profile companies reduced their advertising spend on Twitter?
Yes, companies such as Apple, Amazon, and Disney have reportedly reduced their advertising spend on Twitter compared to the previous year.
What role is Twitter’s new CEO, Linda Yaccarino, expected to play?
Linda Yaccarino is expected to primarily focus on business operations, potentially helping to mend Twitter’s relationships with advertisers and addressing issues surrounding moderation for hate speech, pornography, and more.