Linda Yaccarino became CEO of Twitter today, and she has a tough job ahead of her. That’s because Twitter’s ad revenue is down 59% year over year, according to an internal filing obtained by The New York Times.
Despite Elon Musk’s recent optimism about the progress of Twitter advertising, stating that “almost all advertisers are back” and predicting the profitability of the platform, the situation remains uncertain.
Something doesn’t add up. In the five weeks from April 1 to the first week of May, Twitter’s advertising revenue in the United States was $88 million. Twitter often missed its weekly sales forecasts, sometimes by as much as 30%, The Times reported.
Why advertisers are fleeing. An increase in hate speech and explicit content, along with an increase in advertisements for online gambling and marijuana products, caused concern.
According to the internal document, Twitter’s advertising revenue in the United States is expected to drop at least 56% each week compared to the previous year.
Twitter’s advertising sector is crucial to its success and value, accounting for 90% of its revenue.
When he acquired Twitter for $44 billion in October and took the company private, Musk pledged to create “the most respected advertising platform.” However, he soon strained relations with advertisers by firing key sales executives, promoting a conspiracy theory on the platform and reinstating previously banned Twitter users.
How brands reacted. Several major advertising agencies and brands, including General Motors and Volkswagen, suspended their advertising investments on Twitter. Musk had projected Twitter’s 2023 revenue to reach $3 billion, down from $5.1 billion in 2021 when Twitter was a publicly traded company.
Several of Twitter’s top advertisers, such as apple, Amazon and Disney have reportedly reduced their spending on the platform compared to the previous year, according to three former and current Twitter employees. They also noted that high-value banner ads on Twitter’s trending page, which are often bought by big brands for promotional purposes, often don’t sell.
Twitter has faced public relations problems with major advertisers, including Disney. In April, Twitter mistakenly gave a gold tag, indicating a paying advertiser, to an unaffiliated account called @DisneyJuniorUK. The account then posted offensive content, prompting Disney to demand an explanation and assurances from Twitter to avoid such mistakes in the future.
Why we care Despite its challenges, Twitter remains a powerful platform that reaches a large global audience. The platform still has a user base of millions who engage daily, providing unique opportunities for brand visibility and engagement.
The changes begin. Yaccarino, the NBCUniversal executive recently named Twitter CEO by Musk, is inheriting several challenges. He took over as CEO today, weeks ahead of schedule, the BBC reported.
Damage done? New leadership under Yaccarino could signal imminent changes in its approach to problematic content, potentially improving the advertising environment. Twitter has also added Joe Benarroch, formerly senior vice president of communications, advertising and partnerships at NBCUniversal.
Advertisers should keep an eye on Twitter’s changes, as it may continue to be a potential key player in digital marketing strategies.
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