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Twitter’s Ad Revenue Continues to Decline Under Elon Musk
Introduction
Twitter has been experiencing a decline in ad revenue over the last year, with its US ad sales down 59% year-over-year. Despite Elon Musk’s assurance that advertisers had been coming back to the platform steadily, businesses are spooked by Musk’s reformations at the app, which have included new rules around acceptable speech and the reinstatement of some of the platform’s most controversial users. This article explores the current state of Twitter’s ad sales and the challenges that incoming CEO Linda Yaccarino will face.
Twitter’s Internal Overview of its Ad Sales Performance
Twitter has recently shared an internal overview of its ad sales performance, which showed that total ad sales are down 59%, while the company is regularly falling short of its US weekly sales projections. This decline in revenue is worse than the 50% decline that Musk confirmed in March, which indicates that businesses are still wary of Musk’s reformations.
Musk’s Controversial Opinions
Elon Musk has been sharing his often-controversial opinions on hot-button topics, including gender affirmation, the war in Ukraine, the government’s COVID response, population collapse, crime, immigration, and more. Although his stance is noble in some ways, the side effect is that Twitter’s ad revenue is going to take a hit as a result.
The Effect of Brand Safety Team Leaving the Company
Two of Musk’s top brand safety experts have already left the company after he sought to reverse their decision on supporting the release of a controversial anti-trans documentary. This has led to ad partners‘ increased concerns, given that Twitter’s brand safety team has now been further weakened, and bent to Musk’s ideological will. This, in turn, could see Twitter’s ad revenue decline even further in the coming months.
Augmenting Twitter’s Income Streams
Musk has also been seeking to augment Twitter’s income streams, primarily via subscriptions, both to Twitter itself and to individual creators in the app. Despite Musk removing legacy verified ticks and forcing advertisers to pay for Blue to keep running ads, Twitter Blue take-up has remained at less than 0.3% of Twitter’s total user base, equivalent to around $16.8 million per quarter. Even if Twitter’s total revenue number has declined, Twitter Blue income is still only a fractional element in Twitter’s broader revenue pie.
The Challenges for Incoming CEO Linda Yaccarino
Incoming Twitter CEO Linda Yaccarino will inherit a challenging situation when she takes over at the app shortly. She will have to re-build Twitter’s ad business and win back advertiser trust. Yaccarino has a lot of experience in building such a business, but she must push back on Elon’s various whims and ensure that he does not continue to spook already wary brand partners. This can be a tall order, given Musk’s stated ambitions for the app.
Conclusion
In conclusion, Twitter’s ad revenue has been experiencing a decline over the past year under Elon Musk’s leadership. Musk’s controversial opinions and reformations have spooked businesses. Although Musk has been trying to augment Twitter’s income streams via subscriptions, this is still not enough to keep the app running. The challenges that incoming CEO Linda Yaccarino faces are great, but she has much experience in building ad businesses. Ultimately, Twitter needs to gain back advertisers‘ trust, which is not an easy task to accomplish.