Advertisers avoid Elon Musk
Twitter threatens dramatic revenue slump
4/11/2023 4:43 p.m
Experts estimate Twitter’s advertising revenue for the current year at less than three billion dollars. That would be a slump of almost 30 percent. Analysts see responsibility with the new owner Elon Musk. Meanwhile, the mountain of unpaid bills is growing.
Because many advertisers feel alienated by Twitter boss Elon Musk, the company’s income will fall sharply this year, according to experts. Sales are expected to be 28 percent lower than in 2022, industry watcher Insider Intelligence said. They would be less than three billion dollars (2.8 billion euros).
“The biggest problem is that advertisers don’t trust Musk,” said analyst Jasmine Enberg. Twitter makes most of its revenue from advertising. In order to regain the trust of the companies, Twitter must manage to distance itself from Musk’s public image, Enberg explained.
The billionaire took over the network last fall. Then he shut down the moderation of the content distributed there – but this is very important for potential advertisers who want to present their offers in a positive environment.
“Platform Where Chaos Reigns”
Many users who had been banned for spreading hate or misinformation were reinstated on Twitter at Musk’s behest. This included ex-US President Donald Trump. Big brands don’t want to spend money on advertising on a platform “where chaos, random changes and uncertainty prevail,” explained analyst Enberg.
After the takeover in October, Musk fired the entire executive floor and also drastically reduced the Twitter workforce – from around 7,500 to around 2,000. Since then, various lawsuits have been brought against the company. For example, a group of ex-managers is suing for reimbursement of legal costs in the amount of one million dollars. Landlords of office buildings, consultants and subcontractors also went to court because of unpaid bills. The Wall Street Journal estimated the outstanding costs in February at a total of $14 million, not including interest.