Elon Musk is selling off advertising to find income

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Since the end of October 2022 and the takeover of Elon Musk, Twitter has struggled to find revenue. Several major advertisers quickly fled the platform in the face of the risks associated with the social network’s new moderation policy. Moreover, these fears were partly realized when Twitter reinstated the tens of thousands of accounts banned for disinformation or incitement to hatred. Worse, while Elon Musk pledged himself to provide guarantees to cautious advertisers, his political positions have only worsened the situation.

At the same time, the businessman’s grand plan to rework the social network’s economic model in order to depend less on advertising – which represented almost 90% of the group’s turnover for the year 2021 – still does not take place. not shape. Result: while waiting for a fundamental recovery, the company is trying to save the furniture with ephemeral offers.

Promotion: two for the price of one!

According to app analytics firm Sensor Tower, 75 of Twitter’s 100 biggest advertisers before Elon Musk took over spent nothing on the platform in the first week of 2023. similar at the end of December. Among the figures of this exodus are the car manufacturers General Motors and Volkswagen, the airline company United Airlines or the pharmaceutical company Pfizer.

To compensate for these departures, Twitter offers discounts. According to the wall street journal, the company launched a major promotion in mid-December: if advertisers spend between 250,000 and 500,000 dollars in the social network’s advertising space, the latter offers twice as much! The only restriction on the agreement, the envelope must be spent before February 28, and this is no coincidence. On February 13, the Superbowl takes place, the final of the American football championship (NFL) whose half-time show has become a cultural event in its own right. Followed by more than 99 million spectators in the United States alone, it is a must in the advertising world, during which Twitter achieved its biggest revenue in 2022. Better than during Black Friday!

In addition to the leverage effect on expenses, the offer also aims to introduce brands to Twitter’s new advertising tools. Advertisers taking advantage of the promotion will, for example, have to use a filter intended to control the content around the advertisement. They will be able to provide a list containing up to 1,000 keywords, which the social network undertakes not to display above or below their advertising. It is difficult to estimate whether these new safeguards will be sufficient: several studies indicate that the number and frequency of hateful content has drastically increased on Twitter since Elon Musk took power. And, at the same time, the social network would think of lifting its blocking of political advertisements, even though Musk has just asserted himself as a conservative who votes for the Republicans.

Auction

Twitter’s new owner has been saying for months that, thanks to cost-cutting, the company should break even in 2023. But on the other hand, he keeps wagging his employees about the risk of bankruptcy, a technique he also uses in his other businesses to create a sense of urgency. Since taking power, the businessman has laid off 80% of the workforce, which has gone from 8,000 to 2,000 employees, and it’s not over. The company again laid off dozens of workers earlier this year.

But without advertisers, Twitter is quickly going to have a revenue problem, and while Elon Musk has hinted that he wants to depend less on them, he’s never been clear about his intentions regarding the place of advertising on Twitter. Half-heartedly, he hinted at the project to transform the social network into a “super-app” like the Chinese WeChat. This shift would involve the arrival of a payment system, for which the company has started the process. But the launch of the new version of the Twitter Blue subscription, supposed to serve as the cornerstone of the new model, completely failed, in addition to sparking a confrontation with Apple over the commission charged by the App Store. As a result, the social network has increased the price of the subscription, from 8 euros when purchased on the web version of the site, to 11 euros when purchased from the app on iPhone. Coming into effect at the beginning of the year, this price increase has greatly annoyed some of the few followers of Twitter Blue.

Since structural changes do not take or are delayed, the company is trying to make a splash. Elon Musk has suggested that Twitter could auction off some 1.5 billion usernames (which take the form @elonmusk, for example) that are used by long-dormant accounts. Short names with two or three letters, or those with one number, are already considered extremely rare goods. They also regularly attract hackers, who manage to sell them at exorbitant prices on the black market. Ironically, the company is also auctioning, between January 17 and 18, 631 objects taken from its offices. Among the prizes to be purchased is notably a luminous neon bearing the effigy of the group’s logo, a pizza oven or computer equipment.

Musk continues to rock Twitter

To change Twitter, Musk continues to shake up its foundations. Since the beginning of 2023, the site no longer allows tweets to be displayed in chronological order, and it should very soon allow messages of more than 4,000 characters, compared to only 280 today. This would be a major shift for the social network whose brevity of messages was the differentiating element. In addition, Twitter is already testing a virtual currency, the Corneraround which would revolve new mechanisms for remunerating creators as well as those already existing (subscriptions, donations, etc.).

At the same time, Twitter has since Saturday cut off access to its API, the interface that allows third parties to access certain data such as the publication of tweets or trends. As a result, many services intended to improve and facilitate the use of the social network no longer work. Since the company does not communicate on the subject for the moment, some have deduced that it was a technical problem. But according to The Informationthe cut would be voluntary.

According to the New York Times, Musk again signaled to his teams that he must validate any changes himself. However, he announced – following a hasty poll on his Twitter account – that he would leave his position as CEO of the company, and he takes care more and more of one of his other companies. , Tesla, under pressure from shareholders. ” We will agonize until we get as close to the perfect product as possible. “, he wrote to the employees of the social network.