Twitter’s ad revenue has gone down since Elon Musk took over the company in October 2022. In the five weeks from April 1 to the first week of May 2023, Twitter’s US advertising revenue was down 59%.
The decline in ad revenue is a major setback for Twitter, as advertising is the company’s main source of revenue. In 2021, Twitter reported $5.08 billion in total revenue, up 37% year over year. Of that, $1.41 billion came from advertising.
In a tweet on July 16, 2023, Musk said that Twitter’s ad revenue had not increased as expected in June, but that July was “a bit more promising.” He also said that Twitter was still in negative cash flow. But honestly, Twitter’s ad revenue is expected to decline further in 2023, with some analysts predicting that it could fall by as much as 70%.
Now there can be a number of factors that have contributed to the decline in Twitter’s ad revenue. Including the ongoing war in Ukraine, the global economic slowdown, Musk’s own controversial statements, and actions since taking over the company, Increased competition, etc. Let’s have a thorough discussion.
Why Has Twitter’s ad revenue declined since Elon Musk took over the company?
The ongoing war in Ukraine
The war in Ukraine has led to a decline in advertising spending overall, as businesses have pulled back on marketing efforts. Twitter is no exception, and its ad revenue has been hit hard.
The global economic slowdown
The global economy is slowing down, and this is also having an impact on advertising spending. Businesses are less likely to spend money on advertising when they are not sure about the future of their own finances.
Elon Musk’s controversial statements and actions
Musk has made a number of controversial statements and taken a number of actions since taking over Twitter, which has made some advertisers wary of using the platform.
For example, Musk has said that he wants to make Twitter a more open platform for speech, which could lead to an increase in hate speech and other forms of harmful content.
This could make advertisers hesitant to place their ads on Twitter, as they do not want their brands to be associated with this type of content.
Increased competition from other social media platforms
Twitter is facing increased competition from other social media platforms, such as Meta’s (formerly Facebook) Threads app. Threads is a new social media app that is designed to be more private and intimate than Twitter. This could be taking some users away from Twitter, and it could also be making advertisers less likely to place their ads on Twitter, as they may be concerned that their ads will not be seen by as many people.
Effects of the Loss on Twitter’s Ad Revenue
The decline in Twitter’s ad revenue is a sign of the challenges that the company faces. Musk will need to find a way to increase ad revenue if he wants Twitter to be successful in the long term.
The decline in ad revenue could have a number of negative consequences for Twitter. It could lead to layoffs, a decline in the company’s stock price, and even bankruptcy.
Elon musk has also said that he wants to make Twitter more profitable, which could mean making changes that alienate some users.
It remains to be seen how Musk will turn things around for Twitter. He has said that he wants to make Twitter a more open and free platform for speech, which could attract new users and advertisers.