Elon Musk the founder of Tesla and world’s richest person quoted on Friday that “Twitter has seen a drop in revenue,” as a growing number of advertisers pause spending on the platform in the wake of his $44 billion acquisition. Advertisers suddenly stopped paying for ads on Twitter.
“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists,” he tweeted. “Extremely messed up! They’re trying to destroy free speech in America.” He added to his tweet.
Why Twitter has seen a drop in revenue?
Famous brands like General Mills and the Volkswagen Group, pause advertising on the social network and as civil society organizations called on Twitter’s advertisers to halt for undefined time for all spending globally, As they are uncertain about Twitter’s future under leadership of Elon Musk.
“We have paused advertising on Twitter,” Kelsey Roemhildt, a spokesperson for General Mills, told CNN in an official statement, making it the first company that doesn’t compete with Musk’s Tesla to confirm such a move. “As always, we will continue to monitor this new direction and evaluate our marketing spend,” the spokesperson said.
Another big bull company, Volkswagen Group, which owns luxury car companies like Audi, Porsche and Bentley, confirmed it had recommended its brands “pause their paid activities on the platform until further notice.” These are main companies because of which Twitter has seen drop in revenue.
The Wall Street Journal, which was first to report the moves, also stated that Pfizer and Mondalez are pausing ads on Twitter. Which added fuel to it, due to which again Twitter has seen drop in revenue.
General motors already given hint that they would pause paying for advertisers on twitter till they evaluate performance of twitter under the new leadership. Toyota, another Tesla competitor, previously told CNN that it is “in discussions with key stakeholders and monitoring the situation” on Twitter
After Elon’s acquisition of twitter, organizations including the Anti-Defamation League, Free Press and GLAAD, increased their pressure campaign for more brands to rethink advertising on Twitter. As they feels uncertainty about Twitter’s future.
After months of uncertainty about Musk’s pending acquisition, advertisers are now confronting questions around how Musk will change the platform ? how it shall affect to user experience ?which is already an also-ran in the digital ad spa figure, he has promised to rethink Twitter’s content moderation policies including undo permanent bans of controversial figures, including former President united states Donald Trump.
If this happens then this policy change may create a challenge for brands, which are sensitive to the types of content their ads run against, an issue made more complicated by social media. Most market owner companies at the thought of having their ads run alongside really toxic content such as hate speech, pornography, biased or misinformation.
Along with these high valued companies, other big bulls like the Interpublic Group, which works with consumer brands such as Unilever and Coca Cola, earlier this week also recommended its clients to stop advertising on the platform due to which Twitter has seen drop in revenue.
Musk has said he’s not a fan of advertising line and is currently working to boost Twitter’s subscription revenue to boost its bottom line and be less dependent on ad sales, which account for 90% of Twitter’s overall revenue. But this shift won’t happen overnight, he is not having magical stick which change the world 360 degree for the twitter. if it happens at all. Musk said he plans to launch an $8 per month subscription plan that will provide users with a verification mark, as well as several other perks, but the plans has faced sharp backlash.
In the meantime, Musk is working to stave off a possible advertiser exodus. Musk’s team spent Monday “meeting with the marketing and advertising community” in New York, according to Jason Calacanis, a member of Musk’s inner circle.
Musk also met earlier this week with a group of leaders of civil society organizations, including the ADL, Free Press and the NAACP, to address concerns about a rise in hate on the platform. Which needs to be curb at its initial state. Representatives who attended the meeting told CNN they were encouraged by Musk’s willingness to talk and his previous commitments not to change the company’s content policies ahead of the midterms, but called on him to take further steps to protect the twitter platform.
Since meeting with Musk, representatives of some of the same organizations said, Twitter’s new owner has demonstrated “erratic” behavior that has “betrayed” the commitments he made privately to the groups. Which is unethical as well as not acceptable for the future of Twitter.
After $44 billion Twitter acquisition was completed, Musk wrote an open letter attempting to reassure advertisers that he does not want the social network to become a “free-for-all hells cape.”
“Fundamentally, Twitter aspires to be the most respected advertising platform in the world that strengthens your brand and grows your enterprise,” he wrote. “Let us build something extraordinary together.” He added.
In world of technology every change needs some time after Elon’s acquisition of Twitter its not that public is not accepting new technology or because of Elon Twitter has seen drop in revenue. It’s a uncertainty in the future of Twitter because of Elon’s track record, market is taking time to trust new leadership. In the future course market may boost for the Elon as well as for Twitter.
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