New Report: Twitter’s Ad Revenue Woes Are Even Worse Than Expected
from the free-falling dept
We knew that Elon Musk had driven away tons of top advertisers, which is kind of a big deal, as the company has been desperate for revenue, if only to cover the interest payments Elon loaded the company with by using a $13 billion loan as part of his $44 billion purchase. Elon keeps talking about how much he’s cut costs, but killing off the revenue isn’t particularly helpful either. Earlier, we had noted that both Elon directly, and other internal reports, had suggested that ad revenue at the company had been sliced by a somewhat astounding 40%. Since then, we’ve seen that the company is desperately offering to give advertisers a $250k match if they promise to spend $250k.
Now, Reuters is reporting that the ad revenue decline may be even worse that reported earlier. Apparently ad spending in December (typically a pretty big advertising month) was down an absolutely jaw dropping 71%.
Advertising spend on Twitter Inc dropped by 71% in December, data from an advertising research firm showed, as top advertisers slashed their spending on the social-media platform after Elon Musk’s takeover.
The recent data by Standard Media Index comes (SMI) as Twitter is moving to reverse the advertiser exodus. It has introduced a slew of initiatives to win back advertisers, offering some free ads, lifting a ban on political advertising and allowing companies greater control over the positioning of their ads.
And, the numbers may actually be even worse when you look at the details. An Axios article from a couple weeks ago did note that “dozens of media companies” are still doing content advertising deals with Twitter, mainly around sporting events. Elon even tweeted out the story in an effort to show that things are supposedly going great with Twitter advertising. Except there was an important detail buried in the article:
Most of these media partnerships are multiyear deals and were brokered before Musk took over Twitter.
In other words, these deals are legacy deals that were locked in pre-Musk, suggesting that companies might kill them if they could, and it may be difficult to get them to re-up when the contracts are over.
I’m sure some organizations will continue to advertise, because they don’t much care about the details, but it’s still quite shocking just how many have already pulled out, and I wouldn’t hold out that much hope that Elon is doing anything to build a more welcoming environment for companies concerned about their brand reputation.
Filed Under: advertising, elon musk, social media
Companies: twitter
Comments on “New Report: Twitter’s Ad Revenue Woes Are Even Worse Than Expected”
They’re taking the mass shooting approach to winning back advertisers, doing everything except the thing that will have the most impact: bringing back actual content moderation.
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Oh boy, lifting a ban on political messaging.
Let’s see how THAT will go for Elon!
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That’s what makes the whole thing true schadenfreude bait: He could solve his woes so very easily but because it would require admitting he was wrong and giving the boot to the people cheering him on and his ego won’t allow him to do either he’s all but ensured that the platform and company will tank and the only question left is how quickly.
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Amazing, the people who simp for Musk here in the comment section seem to have the same problem with their egos and admitting when they are wrong.
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Turds of a feather stick together.
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He bought the platform wanting to give special treatment to the far right, looked through Twitter’s internal communications and discovered that was already the case but couldn’t accept it. He wanted to be seen doing something to keep the chud hero worship flowing so he opened up Pandora’s box and now he’s suffering the consequences, steadfastly refusing to close the box or make any attempt at damage control, even as the company creeps deeper into the red and the chuds begin to turn on him.
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You seem to be forgetting the part where he fired anyone who could actually help him fix things even if he suddenly did get a taste for humble pie.
“…these deals are legacy deals that were locked in pre-Musk, suggesting that companies might kill them if they could…”
Or, they could do like Musk and not bother to pay what they owe.
Re: I think they'd have a good case for that
Musk has changed Twitter’s business so completely that if I were an advertiser, I’d been contacting my legal team to get out of my contract.
Look, I was half-joking when I said that number was at LEAST 40%, okay?
I bet the 71% is just a conservative estimate and the real number starts with three digits and ends with at least 5…
“Most of these media partnerships are multiyear deals and were brokered before Musk took over Twitter. ”
The Elmo effect, let someone else do the hard work than take credit for it.
'How do I get them to stay without admitting I was wrong on anything...'
Most of these media partnerships are multiyear deals and were brokered before Musk took over Twitter.
Nothing like a ticking clock to really twist the screws.
Knowing that he has until the current deals lapse to figure out a way to get them to re-sign unless he wants to see even more of the increasingly scarce advertisers to leave is I’m sure a real joy to contemplate, and it couldn’t happen to a more deserving person.
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Keeping the legacy deals is problem for the future, his immediate problem is getting advertisers to return to Twitter. If he can’t do that, those legacy deals will cheer when the escape them because Twitter went bust..
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How far in the future? Could be dropping half of those in a month or two – only Space Karen knows.
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The pre-negotiated partnership deals are probably what are keeping the lights on today.
Remember that when Elmo took over, Twitter instantly needed to double its existing revenue stream in order to offset the debt.
If revenue has dropped by 70% from pre-takeover, it means that Twitter is bringing in only 15% of what it needs to survive.
All we can do now is sell popcorn while waiting for the bird to fly into the glass door.
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Twitter should start selling popcorn.
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I’d say that would be a great revenue stream – but can you imagine the food standards that he would be avoiding to get the product out of the door? I certainly wouldn’t want to eat it.
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I understand. I really do. But this schadenfreude you enjoy comes at the cost of up to 7,500 employees by the time the final curtain falls. And having opened up that view, I find it hard to narrow it back to just Elon again.
But, it could be worse. And it could have been handled even worse.
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Oh I feel sorry for any innocent employees caught in the crossfire and hope that they can find a new job to replace this one before they get canned or or goes under, but unfortunately that’s kinda how it goes in this system where one or two idiots and/or egotistical jackasses can tank an entire company and the ‘best’ you can look forward to is hoping that those particular people suffer at least a fraction as much as the rank and file.
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What’s the alternative? CEOs should never experience the consequence of their actions, because they have the inherent ability to make things a lot worse for a huge number of subordinates underneath them?
It will suck for the employees just following orders. Don’t get me wrong. But the alternative, which is CEOs getting a free pass on everything they do, is even worse for everyone in the long run.
At this point, Tumblr has a better chance of regaining some of its value than Twitter does.
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Tumblr wears it’s ashes as body paint with an odd sense of sometimes misguided pride… The users there literally use the phrase ‘hellsite’ as an affectionate way to refer to the site.
Twitter is actively burning it’s own clothes and yelling at the users who point this out, all while insisting it’s wearing the most regal clothes imaginable to the point of being fit for an emperor. The users are fleeing due to the new ruler acting as the queen of hearts toward staff and users alike while mismanaging the kingdom.
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Tumblr: Hellsite (complimentary)
Twitter: Hellsite (derogatory)
Go fash no cash
Elmo's Econ classes didn't cover ...
Him being a complete jackass and ignoring common business practices, like not signing a deal until after due diligence was finished.
Since he’s on a margin call for $13B-ish where does he have to sell more Tesla stock to keep it above water?
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There’s no margin call on the loan… that was reported, but turns out to have been false.
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Thanks
Huh, paid the interest
Bloomberg and the Financial Times report that Twitter made its $300M quarterly interest payment on the bonds today.
There is of course considerable speculation about whether they’ll make future ones. Bankers all seem to agree that if they don’t, the banks will force Twitter into bankruptcy and take it away from Musk, even though they really do not want to own it.
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Assuming that’s not Musk dipping into his personal finances to kick the can down the road my first thought would be that it’s not too hard to scrape together some cash if you just don’t pay your bills other than the one you can’t afford not to pay, however if that is the source of the money then I don’t see that working very well long-term as the two pending legal actions for that very thing aren’t likely to leave Twitter in a better situation money-wise.
The best part about the whole mess is watching all the Musk stans going from “Elon is a genius that you can’t understand” to “Leave him alone, what has some rich guy who commands boundless influence ever done to hurt you” in record time.
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Isn’t the whole mess partially because he doesn’t command boundless influence regardless of record spending. Boundless influence would have most people agreeing with him, including advertisers.
I think boundless influence can only take you so far, as long as you make people feel safe and the happy chemicals go off in their brain. It’s one thing to command clout and bargaining power by being a jackass who builds fame by dangling one’s balls over an active chainsaw. People eat that sort of stupid shit up all the time.
Where people stop is when you do something like dangle someone else’s balls over an active chainsaw. Most rational people will leave. But there will exist a minority of stans who thump their chests and call for everyone to come back, because they’re convinced that it won’t be their nutsack at risk of being eviscerated.
Musk is learning first hand what it’s like to not only tank a company and brand, but whatever goodwill he managed to accumulate from people in power who tolerated him.
here's how it works, Elon
How can this so called business genius not get Twitter’s fundamental business model? It goes like this:
Attract users to create content that attracts advertisers who will pay for the ad space. Hire mods to axe the ad-unfriendly content.
In practice it works like this: L’Oreal uses Twitter to reach an audience of young females who like to yack about makeup. Then incels arrive and scare the young females away. This also scares away L’Oreal, who is not interested in advertising to incels.
But Elon thinks the incels should have free speech. That’s nice. Who’s gonna pay for that? Answer: nobody.
So now we wait for Twitter to go under, the new owners to restore the old business model, rehire the mods, and for L’Oreal to return. Sigh.
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