Twitter has seen a major decline in advertising revenue in the last year, according to a new report, as the platform continues to struggle after its acquisition by Elon Musk.
Musk, best known as the head of Tesla and SpaceX, officially acquired Twitter in October to the tune of $44 billion, claiming an interest in reshaping the platform with more conservative-friendly “free speech absolutism” ideals. His time in charge has been marked by considerable tumult, laying off most of the company’s staff and implementing changes to its verification services that resulted in a flood of users impersonating major figures and brands.
Twitter has also seen an uptick in hate speech from users since October, a trend that, in concert with other factors, led many to predict that the platform would become toxic for advertisers. On Monday, those predictions were seemingly substantiated by internal revenue documents obtained by The New York Times.
In the new report, Twitter claimed to have generated $88 billion in advertising revenue in the five weeks between April 1 and the first week of May, a steep 59 percent drop compared to the same period last year. The company has regularly fallen short of ad sales projections in recent months, with the documents suggesting that the struggle is expected to continue, despite Musk’s recent assertion that “almost all advertisers have come back.”
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Newsweek could not reach Twitter for comment, as the company set its press line to automatically respond with a crude emoji in March. Newsweek reached out to social media advertising experts via email for insight.
The report also noted that the company expects to see ad sales down by roughly 56 percent compared to the same numbers last year for each week moving forward. The increasing prevalence of hate speech, pornography and ads for seedier products like drugs and gambling were all cited as reasons for the decline. Ad executive Jason Kint also told The New York Times that Twitter’s generally “unpredictable and chaotic” actions of late have spooked potential buyers.
“Advertisers want to run in an environment where they are comfortable and can send a signal about their brand,” Kint said.
Musk is set to hand over the reins as CEO of Twitter to Linda Yaccarino. Given her prior experience as head of sales at NBCUniversal, there is hope from some in the industry that she will be able to turn the company’s advertising fortunes around. Dave Campanelli, the chief investment officer of Horizon Media, expressed such hope in a statement to the Times, but said that the process will be “a tall order.”
