Big corporations stop advertising
Musk complains of a massive drop in sales on Twitter
11/04/2022 5:51 p.m
Several companies stop advertising on Twitter after Elon Musk took over the company. A permanent withdrawal of large advertisers would be a problem for the short message service and Musk. The new Twitter boss sees activists as masterminds of the movement.
New Twitter owner Elon Musk has complained of a slump in sales after major companies paused advertising on the online service. Musk blamed “activist groups” who put pressure on advertisers. Nothing has changed in dealing with controversial content, and everything has been done to satisfy these activists, Musk wrote on Twitter. “They are trying to disrupt free speech in America,” he claimed, without naming the groups.
On Friday, the VW group joined other large companies that are suspending their advertising on Twitter. General Motors stopped advertising on the platform last week. The pharmaceutical company Pfizer and the food giants Mondelez and General Mills are said to have taken similar steps.
Possibly even more threatening for Twitter’s advertising business, which accounts for around 90 percent of sales: the large international advertising groups are also keeping their distance. The industry giant IPG, which manages billions in advertising budgets for companies such as Coca-Cola, American Express, Levi Strauss and Spotify, is said to have advised customers to stop advertising on Twitter just a few days after Musk’s takeover.
A permanent withdrawal of major advertisers would be a problem for Twitter and Musk. The service recently wrote red numbers. Musk had also taken out loans of around 13 billion dollars for the takeover – and according to media reports, servicing them requires more money than the Twitter business generates in free funds. Shrinking revenues would be particularly inconvenient. Musk raised concerns himself with constant criticism that Twitter restricts freedom of speech too much.
In an open letter to advertisers last week, he promised that not everyone would be allowed to express everything on Twitter without consequences. Then, over the weekend, he himself posted a link to an unsubstantiated conspiracy theory about the attack on Paul Pelosi, the husband of US House Speaker Nancy Pelosi.