Twitter Ad Volume Dropped Nearly 50% in November

Twitter

Although Twitter’s problems with advertising revenue do not date from the takeover of the platform by Elon Musk, the change in management at the head of the social network has contributed to the reduction of these sources of income.

Twitter’s difficulties with advertisers do not date from the acquisition of the platform by Elon Musk. Indeed, Twitter was already facing strong competition from larger and faster-growing social media platforms. Additionally, advertisers’ focus on improved targeting with business results and a sluggish ad economy also put Twitter’s revenue forecast at risk. To date, Elon Musk’s takeover of the social network has only diminished Twitter’s already precarious sources of advertising revenue.

According to a recent report by Standard Media Index* (SMI) on ad spend in November 2022, the first full month since Elon Musk took over Twitter, the social network’s advertising expenditure dropped by 46%compared to 2021. More worryingly, SMI also found that marketers who had “pre-booked” ads on the platform for the last two months of 2022 had backed out of their engagement. In addition, SMI noted a decrease in the number of Twitter ad reservations for January and February 2023 compared to previous years.

In November 2022, SMI found that Twitter had lost nearly 31% of the total advertising funds initially planned for the social network. SMI said such a sudden loss of advertising funds is unusual, with the month-long ad boycott Facebook faced a few years ago being the only recent comparable example. The report also showed that TikTok benefited the most from the withdrawal of advertisers from Twitter. Market share of the platform compared to its competitors (TikTok, Facebook, Instagram, Snap and Pinterest) in November 2022 is dropped to 7%compared to 10% in October and 12% in September.

This sharp drop in advertising volume on Twitter follows slight annual declines before Elon Musk’s takeover of the platform, finalized on October 27, 2022. For example, the social network’s advertising expenditure over 12 months fell by 12% in October , 15% in September, 5% in August and 1% in October. This decline is part of a broader context as ad spend trends impacted other ad-supported social networks in the second half of 2022, with marketers expressing concerns about headwinds. macroeconomics.

The number of top advertisers leaving Twitter has been well documented. Marketers have shared their concern over the massive layoffs of employees within the platform, a maneuver that has a direct impact on the daily operations of the social network. Marketers also fear for brand safety, given the growing number of fake news and hate messages that are currently emerging on the platform. On the other hand, marketers want stability, which is sorely lacking with Twitter’s new owner, Elon Musk, who has a mercantile, attention-seeking personality.

Nevertheless, there are other reasons why Twitter has never been able to receive advertising funds that other social media platforms have managed to have. A report recently published by Foresterentitled ” Twitter Isn’t Canceled; It’s Downgraded (which can be translated as “Twitter is not deleted, but downgraded”), revealed the other challenges the platform is facing, in addition to changes in ownership and policy. As the report points out, Twitter, with its posts from politicians, artists and news agencies, retains its cultural relevance to users and is far more popular than its rival Mastodon.

However, the report reveals that Twitter is no longer a priority for the advertising industry. Only 1.3% of advertising funds digital in 2022 have been allocated to the platform. One of the reasons for the lack of support from advertisers is the low reach of the social network. While Facebook reaches 63% and Instagram 40% of adults in the US each week, Twitter trails at 22%. Additionally, half of American adults online have never used Twitter.

Surveying ad executives, Forrester found that Twitter’s performance-based ad products lagged Facebook and the faster-growing TikTok (particularly among young adults) among others. advertising medium options marketers now have. According to advertisers, direct-response ads on Twitter do not meet the requirements needed to achieve bottom-of-funnel goals, such as brand preference and purchase. This is why marketers use Meta and other larger channels to achieve these goals. Twitter is best suited for top-of-funnel goals, such as product awareness and consideration.

Advertisers also told Forrester that Twitter’s targeting and personalization capabilities, which have become important in today’s market, are very underdeveloped on the platform. Advertisers are more likely to use Facebook and other digital platforms to “hypertarget” users. Additionally, as a flood of advertisers retreated, Twitter users were exposed to a greater amount of irrelevant advertising messages.

Advertising has been Twitter’s main source of revenue. In 2021, the platform reported total revenue of $5.08 billionadvertising representing $4.51 billion. At the time of its takeover, Elon Musk said he expected the company’s revenue to reach $26.4 billion in 2028, with revenue from subscriptions accounting for $10 billion. These forecasts seem quite optimistic when you consider that Twitter has only recorded a profit in the two years since its launch.

Given recent trends and advertiser concerns, Musk is unlikely to meet his revenue goals for Twitter.

*SMI compiles actual ad agency billing data from all major holding companies and most major independents, which account for approximately 95% of brand ad spend nationwide.

Article translated from Forbes US – Author: Brad Adgate

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