This is what Twitter lost in ad revenue in the last months of 2022
NEW YORK/LONDON (Reuters) – Twitter’s top advertisers slashed their spending after the Elon Musk takeover, according to estimates compiled for Reuters by research firm Pathmatics, in the latest shock to the company’s dominant revenue stream.
14 of Twitter’s top 30 advertisers have suspended all ads on the platform after Musk took over on Oct. 27, Pathmatics estimates. Four advertisers cut spending between 92% and 98.7% from the week before the Musk acquisition through the end of the year.
Overall, ad spending by the 30 largest companies fell 42% to an estimated $53.8 million for November and December combined, according to Pathmatics, although spending increased by six of them.
Pathmatics said the previously unreported numbers on Twitter Ads are estimates. The Company bases its estimates on technologies that track ads on desktop browsers and the Twitter app as well as those that simulate the user experience.
But the company said those estimates don’t take into account deals advertisers may receive from Twitter, or promoted trends and accounts. “It’s possible that spending data will be higher for some brands” if Twitter offers incentives, Pathmatics said in an email.
Twitter did not respond to multiple requests for comment.
At a November event on Twitter Spaces, Musk, who addressed the issue of companies pausing ads, said he understands if advertisers “want to give it a minute.” “The best way to see how things are developing (on Twitter) is to just use Twitter,” he added.
Technology-focused publication The Information, citing details shared by a senior Twitter advertising executive at a staff meeting Wednesday, reported that Twitter’s fourth-quarter revenue fell about 35% year-over-year due to a slump in advertising.
Twitter posted a loss of $270 million in the three months ended June 30, with total revenue of about $1.18 billion. Read more
The Pathmatics estimates show continued disruptions to Twitter’s main revenue stream heading into 2023, led by a decline from major consumer brands.
According to research firm Standard Media Index, which did not provide details, forward bookings, or agreements to secure future advertising, also declined in January and February.
Twitter is moving to reverse the migration of advertisers. It has introduced a slew of initiatives to win back advertisers, introducing some free advertising, lifting the ban on political ads and allowing businesses more control over the placement of their ads.
“They are honestly really amazing incentives. Honestly, I’ve never seen that kind of incentive from an advertiser,” said Molly Lopez, owner of advertising agency HITE Digital Miami.
In addition, Mark DiMassimo, founder of New York-based ad agency DiMassimo Goldstein, said direct marketers and PACs — who spend on Meta Platform Inc’s (META.O) Facebook – may fill the advertising void.
Coca-Cola company (KO.N) It halted spending in mid-November, after buying an estimated $1.1 million in Twitter ads earlier that month, while HBO spending collapsed to nearly $38,000 in December from about $1.1 million in November, Pathmatics found.
Coca-Cola declined to comment. HBO spokesperson Chris Willard would not comment on specifics of ad spending, but said, “We will evaluate the platform under its new leadership and determine appropriate next steps.”
Among the consumer brands, Heinz ketchup maker Kraft Heinz Co(KHCO) and Stouffers meal manufacturer Nestle SA (NESN.S) I turned off all ads, according to Pathmatics. Heinz and Nestle declined to comment.
Target Corp. Retail (TGT.N) and store operator Kohls Corp (KSS.N) The ad was also skipped on Twitter on Black Friday, one of the biggest shopping days of the year, according to estimates. Coles did not respond to requests for comment.
However, Apple (AAPL.O) and PepsiCo Inc (PEP.O) Spending increased, according to Pathmatics.
Apple did not respond to requests for comment. PepsiCo declined to comment.
Financial technology provider SmartAsset and Amazon.com Inc (AMZN.O) He said that Pathmatics’ estimates showing an increase in advertising are inaccurate. Amazon did not provide further details and Smart Asset said the figures were “exaggerated”, without giving details. “We want to reiterate that our numbers are just estimates,” Pathmatic said.
Musk’s arrival on Twitter exacerbated an advertising decline that began in September after Reuters reported that promotional ads appeared alongside tweets urging child pornography.
Estimates showed that most companies stopped spending in November, the same month that Musk reinstated suspended accounts and issued a paid account check that led to fraudsters impersonating the companies.
Communications company AT&T Inc (Tennessee) Mars and the pet food provider cut spending in September due to concerns about brand safety.
As companies back away from Twitter, they have maintained and in some cases enhanced ads on Meta Platform Inc (META.O) According to Pathmatics, on Facebook, Instagram, and on the short-form video app TikTok.
Meta and TikTok did not immediately respond to requests for comment.
AT&T said it paused advertising in September due to “concerns about content appearing alongside” its ads. The company has been speaking to Twitter about its concerns, according to a person familiar with AT&T’s thinking.
Mars said her “suspension remains in effect”.
Twitter told Reuters that it is investing in children’s safety. Read more The platform relies on automation to moderate content and restrict hashtags and search results vulnerable to abuse in areas including child exploitation. Read more
Companies have also cut back on Twitter. As of January 19, cereal maker Kellogg Co. Target and Specialty (Be) He hasn’t tweeted since October; The Coca-Cola and Electronics Retail Company Best Buy Co Inc(BBY.N) She temporarily stopped tweeting in November, according to a Reuters review of the company’s main feeds.
Target, Best Buy and Kellogg’s did not respond to requests for comment.
(Additional reporting by Jessica Di Napoli in New York and Richa Naidoo in London). Additional reporting by Sheila Dang in Dallas; Editing by Vanessa O’Connell and Susan Goldenberg
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