Elon Musk’s Latest Round Of Bigoted Tweets Likely Cost ExTwitter $75 Million Over The Rest Of 2023
We keep pointing out just how incredible it is that Elon Musk is personally responsible for the destruction of so much of ExTwitter's business model. Even if you believe that the company was too bloated, or that it's business model needed to change, as you look at how the company is flailing, it can be tied back almost entirely to Elon Musk being a stupid, ignorant bigot on the platform that he bought.
The product decisions, the renaming, all of that has some impact, but the reason that advertisers keep bailing is because of Elon Musk's awfulness. We noted that back in April. Incredibly, the details highlighting that came out in an email thread created by... Linda Yaccarino, now CEO-in-name-only of ExTwitter, who was about to interview Elon Musk at an event for various advertisers. She wanted to know what advertisers were thinking about advertising on the site, and many pointed out that Musk himself was the problem, way more than the platform.
They were frightened that Musk would say something stupid, hateful, or bigoted next to their ads, and they told Yaccarino that - and a month later she decided to go work for Elon.
One of the biggest barriers to spending more, advertisers say, is Musk's own behavior on Twitter.
And, once again, we're seeing that play out. While Musk keeps trying to blame more advertisers fleeing on Media Matters, the reality is that it was his own embrace of an antisemitic trope that resulted in more advertisers pulling their ads.
Once again, this was a costly decision. The NY Times got its hands on an internal presentation, showing that ExTwitter sales people believe that Musk's actions a few weeks ago likely cost the company $75 million in ad revenue over the final month and a half of the year (often the biggest advertising season).
Internal documents viewed by The New York Times this week show that the company is in a more difficult position than previously known and that concerns about Mr. Musk and the platform have spread far beyond companies including IBM, Apple and Disney, which paused their advertising campaigns on X last week. The documents list more than 200 ad units of companies from the likes of Airbnb, Amazon, Coca-Cola and Microsoft, many of which have halted or are considering pausing their ads on the social network.
The documents come from X's sales team and are meant to track the impact of all the advertising lapses this month, including those by companies that have already paused and others that may be at risk of doing so. They list how much ad revenue X employees fear the company could lose through the end of the year if advertisers do not return.
A few months ago, Yaccarino said that ExTwitter was on a path to profitability by Q1 of next year, and that seems increasingly difficult to believe given the way that her boss keeps driving away millions of dollars in ad revenue.
It's not entirely clear how much ad revenue ExTwitter still makes, but reports suggest that ad revenue has been consistently down about 60% (and drops lower every time Musk does something stupid and bigoted). In 2021, the last year we have full data, Twitter generated $4.5 billion in ad revenue. Cut that by 60% and we're talking about $1.8 billion.
So if we do some very, very rough back-of-the-envelope math here, at $1.8 billion, that's about $150 million per month. So, the final month and half would be in the range of $225 million expected. Perhaps more, given the advertising season. Taking away $75 million of that is... pretty significant.
Again, almost none of this is due to product decisions, but due to Elon Musk's inability to shut up, and his near total credulity in believing every two bit nonsense peddler and bigot he's ever come across.