New Report: Twitter’s Ad Revenue Woes Are Even Worse Than Expected

We knew that Elon Musk had driven away tons of top advertisers, which is kind of a big deal, as the company has been desperate for revenue, if only to cover the interest payments Elon loaded the company with by using a $13 billion loan as part of his $44 billion purchase. Elon keeps talking about how much he's cut costs, but killing off the revenue isn't particularly helpful either. Earlier, we had noted that both Elon directly, and other internal reports, had suggested that ad revenue at the company had been sliced by a somewhat astounding 40%. Since then, we've seen that the company is desperately offering to give advertisers a $250k match if they promise to spend $250k.

Now, Reuters is reporting that the ad revenue decline may be even worse that reported earlier. Apparently ad spending in December (typically a pretty big advertising month) was down an absolutely jaw dropping 71%.

Advertising spend on Twitter Inc dropped by 71% in December, data from an advertising research firm showed, as top advertisers slashed their spending on the social-media platform after Elon Musk's takeover.

The recent data by Standard Media Index comes (SMI) as Twitter is moving to reverse the advertiser exodus. It has introduced a slew of initiatives to win back advertisers, offering some free ads, lifting a ban on political advertising and allowing companies greater control over the positioning of their ads.

And, the numbers may actually be even worse when you look at the details. An Axios article from a couple weeks ago did note that dozens of media companies" are still doing content advertising deals with Twitter, mainly around sporting events. Elon even tweeted out the story in an effort to show that things are supposedly going great with Twitter advertising. Except there was an important detail buried in the article:

Most of these media partnerships are multiyear deals and were brokered before Musk took over Twitter.

In other words, these deals are legacy deals that were locked in pre-Musk, suggesting that companies might kill them if they could, and it may be difficult to get them to re-up when the contracts are over.

I'm sure some organizations will continue to advertise, because they don't much care about the details, but it's still quite shocking just how many have already pulled out, and I wouldn't hold out that much hope that Elon is doing anything to build a more welcoming environment for companies concerned about their brand reputation.