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Twitter has suffered a massive loss in advertising after Elon Musk’s Takeover: Here’s why

Elon Musk’s ownership of Twitter is followed by many setbacks. Top advertisers on Twitter have declined their spending after Elon Musk’s takeover of the company. The data has been collected by the research firm Pathmatics. The news have come after the company suffered a devastating shock to the dominant revenue source. 

Fourteen of the top thirty advertisers on Twitter have stopped advertising on the platform after Elon Musk took over the company on October 27. Furthermore, four advertisers have declined their spending from a significant 92 to 98.7 percent after Musk acquired the company at the end of the year.

It can be summarized that the advertising spending by the top thirty companies has reduced to a42 percent accounting for 53.8 million USD for the total of November and December combined. However, six advertisers have increased their spending.

The estimates are made by the firm based on the technologies that track ads on desktop browsing Twitter apps and others that replicate the user experience. But the company has revealed that such estimates do not signify the deal advertisers that may be received through Twitter or promoted trends and accounts. The spending data could be possibly higher for some brands according to the research firm.

However, Twitter has declined to comment on this matter. In a November event conducted on Twitter Space, Musk addressed the issue of the advertisers walking out of the platform and that he understands if the advertisers would want to take a moment to rethink their decision. He further added that the best way to understand how things are changing on Twitter is to use the application.

Twitter

A technology focussed publication on Twitter has declared that Twitter’s fourth-quarter revenue fell drastically by 35 percent over the year due to the decline in advertising.

In addition, the media platform posted a loss of 270 million USD in the last three months ending on June 30 from its total revenue of 1.18 billion USD.

The main revenue stream on Twitter suffered a pullback from popular consumer brands. At the same time, forward booking or agreements to lock the advertising space has also declined significantly for  January.

Twitter is attempting to undo the advertiser slump caused in recent months. It has initiated many schemes to bring back its revenue in track offering schemes such as free ads, lifting the prohibition on political advertising, and proving the companies greater power to position their ads.

The owner of an ad agency, HITWE Digital Miami has called the initiatives as amazing incentives. In addition, the founder of the New York ad agency DiMassimo Goldstein has stated that the bargain basement direct marketers and the political action committees- a big spender on Meta’s Platform would help to bridge the gap. 

Coco-Cola Co., the largest beverage brand paused spending on advertisements in mid-November after purchasing estimated ads from Twitter with a valuation of 1.1 million USD the same month. On the other hand, HBO’s spending declined to 38000 USD in December from 1.1 million USD in November according to valid sources.

Among other consumer brands, Heinz ketchup makers have stopped advertising through the platform. However, the latter declined to comment on the matter.

At the same time, Apple Co. and Pepsi Co. have increased their spending on ads on Twitter.

Why did Twitter suffer such a significant loss after Elon Musk’s takeover?

Elon Musk’s ownership of the media platform resulted in a drop in advertising that was initiated in September after Reuters reported that the platform promoted tweets soliciting child pornography. 

Elon musk

Most companies stopped spending on advertising on the platform, the same month when Elon Musk restored suspended accounts and released a paid account verification. The latter feature resulted in scammers impersonating professional corporations.

As the companies pulled back on spending in advertising on Twitter, they started boosting advertisements in Meta and short video applications, including TikTok.

Twitter has responded in the matter stating that the platform is investing in child safety at present. The platform is shifting to automation to moderate content and restrict abusive hashtags and search results in fields where child exploitation is common. 

edited and proofread by nikita sharma

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