Is Elon Musk’s Claim about Twitter Advertisers Returning True? Research and Data Show Otherwise
Twitter’s advertisers are not returning as fast as Elon Musk suggests. The Twitter owner had previously said that most advertisers were returning to the platform, but data from research firms and statements from various companies say otherwise.
Decline in Musk’s Twitter advertisers
Twitter had suffered a massive decline in advertising since Musk’s acquisition in late October. However, Mondelez International, Unilever, and Coca-Cola, among Twitter’s top 10 advertisers before Musk took over, are no longer even in the top 50 advertisers in the past two months, according to data compiled by Sensor Tower. Research firm Insider Intelligence this week also slashed its forecast for Twitter’s global ad revenue this year by 37% to $2.98 billion. That would represent a 28% decline from Twitter’s 2022 ad revenue of $4.14 billion.
The controversy around Twitter’s advertising
Since acquiring Twitter, Musk has ordered a series of rapid changes that have rattled advertisers, including laying off thousands of employees to cut costs and rushing the launch of a subscription to let users pay to have their profiles verified. His controversial tweets, including ones that linked to conspiracy theories or waded into debates about racism, have also given advertisers pause, ad buyers have previously told Reuters.
Advertisers not trusting Musk
Despite Musk’s comments that most advertisers are returning to Twitter, some major brands have reported that this is not the case for them. Automakers Volkswagen AG and Stellantis said they had not resumed ads on Twitter. Mars, maker of M&M’s and Snickers, said it is not advertising on the platform. Other advertisers formerly in the top 50 Twitter advertisers that were no longer on that list according to Sensor Tower included Merck & Co, Google, Kellogg, and Facebook parent Meta Platforms. These companies did not respond to requests for comment about their ad spending.
The impact of Musk’s controversial behavior on Twitter’s advertising
“Many advertisers don’t trust him based on past behavior or don’t want to be associated with him,” Insider Intelligence principal analyst Jasmine Enberg said of Musk. Web traffic to Twitter’s ad portal, a website that lets customers set up and purchase ads on Twitter, declined 18.7% in March from the same time last year, said research firm Similarweb, which analyzes traffic to the ad-buying websites of social media platforms. Twitter’s ad business is “eroding” and its subscription product Twitter Blue is seeing only moderate success, Similarweb said in a blog post.
Twitter’s challenge in competing for brands’ marketing budgets
Twitter has the added challenge of competing for brands’ marketing budgets at a time when companies are cutting or reevaluating how much they spend on ads amid concerns about the health of the economy. “They’re spending on platforms that they believe will provide them the highest return on investment, and that’s just not Twitter; it never has been,” Enberg said.
Source : Reuters