Declining Ad Sales at Twitter
Internal forecasts obtained by the New York Times reveal that Twitter is experiencing a substantial drop in ad sales. The social media company, owned by Elon Musk, reportedly saw a 59 percent decrease in ad sales year over year. The decline in ad revenue is a cause for concern for Twitter’s financial outlook.
Challenges with U.S. Advertising Revenue
Twitter’s U.S. advertising revenue for the five-week period from April 1 to the first week of May was $88 million, down 59 percent compared to the previous year. The company consistently falls short of its weekly sales projections, sometimes by as much as 30 percent. This trend indicates ongoing challenges in attracting advertisers to the platform.
Concerns over Content and Advertisers
The rise of free speech and pornography on Twitter, along with an increase in gambling and marijuana ads, has raised concerns among the company’s ad sales staff. Advertisers may be spooked by the controversial content and choose to reduce their spending on the platform. Internal presentations revealed that online gambling and fantasy sports betting companies accounted for a significant portion of Twitter’s top U.S. advertisers.
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Impact on Advertisers and Ad Spending
Large ad agencies and brands, including General Motors and Volkswagen, reportedly suspended their ad spending on Twitter in response to Musk’s decision to fire executives and reinstate previously banned users. Major advertisers like Apple, Amazon, and Disney have also reduced their spending on the platform compared to the previous year.
Twitter’s Financial Outlook and New CEO
The declining ad sales pose a significant challenge for Twitter, as ads have historically accounted for 90 percent of its revenue. The company’s value has decreased from $44 billion to $20 billion, according to a leaked memo. Linda Yaccarino, Twitter’s new CEO, will be tasked with addressing these issues and finding strategies to revive ad sales and restore advertiser confidence.
Twitter’s declining ad revenue and challenges in attracting advertisers highlight the ongoing struggles the company faces in a competitive social media landscape.
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