According to an internal presentation that The New York Times obtained, Twitter’s U.S. advertising revenue for the five weeks between April 1 and the first week of May was $88 million, down 59% from a year earlier. According to the report, Twitter has frequently fallen short of its weekly U.S. sales predictions, sometimes by as much as 30%.
According to documents and seven current and former Twitter workers, this performance is not going to change very soon. The company expects US ad revenue to decrease by at least 56% from a year ago each week this month, per an internal memo.
The New York Times reports that Twitter‘s ad sales team is concerned that the rise of hate speech and pornography on the platform, as well as more ads featuring online gambling and marijuana products, could scare off advertisers.
In January, The Information had reported that more than 500 advertisers stopped spending on the social media platform. The Information had also reported that the company’s daily revenue on January 17 was 40% lower than the same day a year earlier.
Elon Musk said on a Twitter Space audio event on Monday that “extreme pressure” from advertisers in Europe and North America has caused “half our advertising” to disappear. “They are trying to drive Twitter bankrupt,” he said.
In March, Elon Musk sent an email to employees offering them stock grants at approximately $20 billion valuation, less than half of the $44 billion he paid for it. Last week, Fidelity, which owns share in the social media company, valued Twitter at $15 billion.
According to three current and former Twitter workers, some of Twitter’s top advertisers, such as Apple and Amazon, have been spending less money than they were a year ago. Large, customized “banner” ads on the platform’s trends page, which may cost $500,000 for 24 hours and are typically purchased by major companies to advertise events, television programs, or movies, are frequently left empty, they said.
In April 2023, Insider Intelligence cut its forecast for Twitter’s global ad revenue for 2023 by 37% to $2.98 billion. That would represent a 28% drop from Twitter’s projected $4.14 billion in ad revenue for 2022.
Although ads have made up 90% of the company’s revenue for a long time, the company rolled up its sleeves to create different revenue channels such as the paid subscription service Blue after Elon Musk’s acquisition. According to Sensor Tower, Twitter Blue generated $11 million in mobile subscriptions as of March 2023.
According to two individuals familiar with the matter, Twitter is looking into methods to make it simpler for advertisers to purchase space on the social media platform and is trying an automated mechanism outside of the US to close deals.
The platform is seeing an increase in advertising in markets it previously avoided or outlawed, such online gambling and marijuana items. According to one presentation obtained by The New York Times, four of Twitter’s top 10 U.S. advertisers in one week last month were businesses engaged in online gambling and fantasy sports betting. Internal emails reveal that Twitter has started to let advertisements for erectile dysfunction goods and services, as well as cannabis paraphernalia including “bongs, vapes, rolling paper,” among others.