Elon Musk recently said Twitter’s advertising business is booming. “Almost all advertisers are back,” he says. claimedadded that the social media company could be profitable soon.
But in the five weeks from April 1 to the first week of May, Twitter’s U.S. advertising revenue was $88 million, down 59% from the same period last year, according to internal documents obtained by The New York Times. The company regularly misses its U.S. weekly sales forecast, sometimes by up to 30%, according to the documents.
According to the documents and seven current and former Twitter employees, that performance is unlikely to improve anytime soon.
Twitter’s advertising sales staff are concerned that advertisers will be intimidated by the rise of hate speech and pornography on social networks, as well as ads featuring online gambling and marijuana products, people familiar with the matter said. . The company expects U.S. ad revenue to drop at least 56% year-over-year each week this month, according to an internal document.
Those issues will soon be handed over to NBCUniversal executive Linda Yaccarino, whom Musk appointed Twitter chief executive last month. Four people familiar with the matter said she will be back at work on Monday.
Yaccarino declined to comment through a spokeswoman. Mr. Musk did not respond to a request for comment.
The state of advertising on Twitter is very important. That’s because advertising has long accounted for his 90% of the company’s revenue. After Musk bought Twitter for $44 billion in October and took the company private, he vowed:Most respected advertising platformBut he quickly alienated advertisers by firing key sales executives, spreading conspiracy theories on the site, and welcoming back banned Twitter users.
In response, several large ad agencies and brands, including General Motors and Volkswagen, have suspended ad spending on Twitter. Musk said Twitter expects to post $3 billion in revenue in 2023, up from $5.1 billion in 2021 when it was a publicly traded company.
After that, Twitter ratings plummeted. Musk said in March that the company was worth $20 billion, down more than 50% from the $44 billion he paid. Last week, mutual fund giant Fidelity, which owns Twitter shares, valued the company at $15 billion.
Jason Kint, chief executive of digital content next, an association of premium publishers, said Twitter feels increasingly “unpredictable and chaotic.” “Advertisers want to run their ads in an environment where they feel comfortable and can signal about their brand,” he added.
Some of Twitter’s biggest advertisers, including Apple, Amazon and Disney, are spending less on the platform than they did last year, three former and current Twitter employees said. Large, specialized “banner” ads on Twitter trending pages can cost $500,000 for a 24-hour period and are mostly purchased by major brands to promote their events, shows and movies. It is said that it is often not filled.
Twitter has also run into public relations troubles with big advertisers like Disney. In April, Twitter erroneously marked @DisneyJuniorUK accounts not owned by Disney with a gold checkmark (a badge denoting paid advertisers). The account posted racial slurs, prompting Disney officials to demand assurances from Twitter that the description would never happen again. People familiar with the situation said.
Disney, Apple and Amazon declined to comment.
Six ad agency executives who have worked with Twitter said their customers continue to limit their spending on the platform. They cited confusion over Musk’s service changes, inconsistent support from Twitter, and concerns about the continued presence of misleading and harmful content on the platform.
Last month, for example, a photo of what appeared to be an explosion near the Pentagon—which artificial intelligence experts identified as a composite image—was shared by dozens of Twitter accounts, briefly triggering a stock market crash. .
Some advertisers also remain concerned about Mr. Musk’s tweets. In the last month, he has made several posts comparing billionaire investor George Soros, a frequent target of conspiracy theorists, with cartoon “X-Men” villain Magneto. The chief executive of the American Jewish Commission, Ted Deutch, said that Soros and Magneto were Holocaust survivors and that “Jewish lies about wanting to destroy civilization have led to centuries of Jewish persecution.” I was invited,” he said.
“Mr. Musk should know better,” he said.
Ella Irwin, head of trust and safety, the division that oversees Twitter’s content moderation, and AJ Brown, head of brand safety and ad quality, resigned last week, according to current and former employees. three members said. Mr. Irwin and Mr. Brown did not respond to requests for comment.
Musk has promoted a new tool known as adjacency control that allows advertisers to keep ads away from tweets containing certain keywords or posts by certain users. Some advertisers are using tools to keep their content away from Musk’s tweets, according to four people familiar with the matter.
Still, some marketers are returning to the platform. In May, media acquisition group GroupM, owned by advertising giant WPP, told employees it would remove the “high risk” flag on Twitter and instruct clients to return to business as usual at their own discretion. with the determination. Another major advertising firm, IPG, advised clients to be cautious about doing business with Twitter after suggesting a temporary pause in spending last fall.
Twitter is exploring ways to make it easier for advertisers to buy space on its platform and is testing an automated system outside the U.S. to make deals, two people familiar with the deal said.insider previously reported movement.
The company is seeing growth in advertising in areas it once avoided or banned, such as online gambling and marijuana products. In the past week, four of Twitter’s top 10 US advertisers were online gambling and fantasy sports betting companies, according to a presentation. Twitter has also started allowing ads for cannabis accessories such as “bongs, vapes and rolling papers,” as well as erectile dysfunction products and services, according to an internal email.
Adult content allowed on Twitter is a concern among the company’s sales staff. As some employees tried to garner interest from advertisers for Mother’s Day, pornographic videos appeared for potential sponsored search terms such as “MomLife,” according to two people familiar with the conversation. He noticed that he was floating.
Some advertisers hope Yaccarino will solve these problems.
Dave Campanelli, chief investment officer at Horizon Media, said he expected a change after Yaccarino took over. That’s because after Musk took office last fall, media agencies like him struggled to maintain contact with Twitter.
“For a while, I didn’t even know who to call and talk to,” he said. “The addition of Linda could make a big difference.”
He acknowledged that Twitter’s fickle bosses and volatile environment could present challenges for Yaccarino.
“It’s a tall order,” Campanelli said.
Benjamin Marin contributed to the report.
