Twitter Revenues Dip As Advertisers Fear Musk’s Takeover
Space X and Tesla CEO Elon Musk completed the purchase of Twitter in the last quarter of 2022. According to The Wall Street Journal, advertisers began fleeing the social media platform, leading to a huge loss of revenue following Musk’s acquisition. Advertisers have dumped the app amid fears that their advert placement may appear next to controversial content.
Although the app has nearly 400 million users, advertising generates most of its revenue. 90% of Twitter’s income comes from adverts placed by business places and brands. In 2021, $4.5 billion of the platform’s $5.1 billion came from advertisements, making the advertisers’ recent boycott a significant concern for the app.
Last December, Twitter reported about a 40% drop in revenue and earnings after Musk’s takeover. On top of that, the Tesla CEO’s purchase of the platform has incurred about $13 billion in debts, which the platform is currently trying to offset.
According to the Daily Caller, the aftermath of last October’s purchase of the app by Musk led to massive advertisers’ abandonment. About 70% of Twitter’s leading advertisers have yet to spend on the platform as of February. Advertisers are concerned that their ads would appear as “controversial content” under the new management.
Musk took to his Twitter to talk about the potency of the app as a marketing tool as he aims for an upturned revenue.
“The ability of Twitter advertising to reach the most influential people in the world is often not fully appreciated. While a few other social networks are technically bigger, Twitter is where the writers & leaders spend their time.”
However, his post, which had over 30 million views, had little or no effect, and the brand is exploring other means to raise its income.
Last November, the new CEO altered the old verification process by introducing Twitter Blue, a paid subscription offering exclusive user access and the much-awaited edit button. A month after this innovation failed to kick off, Twitter also laid off thousands of employees, with another round following in February. These were attempts to cut costs and increase the platform’s revenue.
Musk Tweeted last month that the app still has financial challenges, stating how the aftermath of his acquisition has been problematic. He, however, added that with consistency, there would be positive financial news soon.