Twitter he has a vital problem. While its owner, Elon Musk, continues to engage in multiple controversies attacking Apple o Eliminating restrictions on disinformation about the covid, the business of red social bleeds out income from advertisingnecessary to keep the company afloat, have fallen 15% annually in Europe, the Middle East and Africa (EMEA), according to an internal report published by the ‘Platformer’ portal.
The bad news do not end here. And it is that weekly advertising bookings are also plummeting 49%as noted by an analyst income of Twitter in the company’s internal communication channels. All of this portends dire prospects. 92% of Twitter’s revenue (4,500 of the 5,000 million dollars in 2021) come from advertising. Without it, your business is in jeopardy.
“It’s catastrophic”
the wave of layoffs and the changes imposed by Musk after taking the reins of Twitter have created a chaotic scenario that in the last month has led large companies to withdraw or freeze their plans to advertise on the platform. On October 31, just days after the ownership change, analysts estimated that the social network risked losing about $15.7 million in ad revenue in the three indicated regions. “It’s catastrophic,” a former company executive told ‘Platformer’.
Last Wednesday, researchers at Media Matters for America published a study in which they found that 50 of the top 100 advertisers of Twitter had chosen to pause their adverts on the platform. Among them would be Ford, Chevrolet, Heineken, AT&T, Jeep, CNN, Citigroup or Verizon, among others. This group of companies would have spent close to 2,000 million dollars on advertising since 2020.
business problem
Twitter has had a problem with its business model for years, much less than that of competitors such as Facebook o Instagram. Aware of this – and with the pressure that has to return the almost 13,000 million dollars that the banks lent it to acquire the platform–, the tycoon has designed a payment plan with which he intends to increase the subscriber base and thus create another source of income that allows the company to stay afloat. For $8 a month, users will be able to have the blue verification mark on their account and see how their messages have more reach than those of non-paying users.
Nevertheless, the ability to acquire the blue verification pin led many accounts to impersonate other people or companies, hitting the reputation of some of them. That – and other controversial decisions like reinstating accounts blocked for spreading hate messages – has led more and more companies to stop advertising on Twitter, thus increasing the potential cost in losses. Advertisers are always looking for digital spaces where the debate is healthier, whiter and far from controversial. Elon Musk’s new Twitter goes in the opposite direction.