Twitter’s advertising woes deepen amid executive turmoil

Internal documents from Twitter suggest that the social media company’s ad revenues are down 59% on this period last year, just one of the service’s advertising woes as top-level departures fan brand safety fears.

Why it matters

It was always going to be interesting: since Tesla and SpaceX CEO Elon Musk’s first murmurs of interest in buying the company for a meme-worthy price per share, the story of Musk-era Twitter has taken place in the full glare of the media. The billionaire has readily courted controversy in his public statements and tweets, while some of the policy changes, such as paid verification, have thrown up serious questions about the place of brands on the platform.

Twitter has for years been more influential than its commercial profile would suggest, but its current financial performance is apparently lagging behind even last year’s figures. The arrival of a CEO with strong pedigree across traditional and digital media appears to be a step in the right direction, especially as the company explores new avenues – like payments – that will require the trust of both its user base and brands.

Ad revenues fall

Documents seen by the New York Times indicate that April-May US ad revenues this year were down 59% year-on-year to $88m. A further document forecasts a 56% drop each week compared to the same week last year over the coming month.

In context

New leadership incoming: The news comes as Twitter’s new CEO Linda Yaccarino, a media veteran most recently at NBCUniversal, is set to take the helm of the ailing company which has struggled to keep advertisers onside following the drama and brand safety fears of the last year.

An aura of chaos: Concerns often centre on the talkative nature of Musk’s leadership, with the owner’s tweets sometimes pre-announcing important decisions. This has added to the aura of chaos that has seen some copycat accounts being mistakenly verified as advertiser brands, with the experience of Disney a significant example.

Important departures: Recent departures of company executives from brand safety and content moderation teams have done little to allay advertisers’ nerves. CNBC reports that the company has lost its VP of trust and safety as well as its head of brand safety and ad quality in quick succession.

Financial implications: In April, revenue forecasts for the full year suggested that the company was set for an overall revenue decline of 28% in 2023. Analysts at Insider Intelligence put it bluntly: “Advertisers don’t trust Musk.”

Sourced from The New York Times, WARC, Deadline, CNBC