Here's what Twitter lost in advertising revenue in final months of 2022
Send a link to a friend
[January 20, 2023] By
Jessica DiNapoli and Richa Naidu
NEW YORK/LONDON (Reuters) -Top advertisers on Twitter slashed their
spending after Elon Musk's takeover, according to estimates compiled for
Reuters by research firm Pathmatics, in the latest shock to the
company's dominant revenue source.
Fourteen of the top 30 advertisers on Twitter stopped all advertising on
the platform after Musk took charge on October 27, according to the
Pathmatics estimates. Four advertisers reduced spending between 92% and
98.7% from the week before Musk's acquisition through the end of the
year.
Overall, advertising spending by the top 30 companies fell by 42% to an
estimated $53.8 million for November and December combined, according to
Pathmatics, despite an increase in spending by six of them.
Pathmatics said the previously unreported figures on Twitter advertising
are estimates. The firm bases its estimates on technologies that track
ads on desktop browsers and the Twitter app as well as those that mimic
user experience.
But the company said those estimates do not account for deals
advertisers may receive from Twitter, or promoted trends and accounts.
"It is possible the spending data could be higher for some brands" if
Twitter is offering incentives, Pathmatics said in an email.
Twitter did not respond to multiple requests for comment.
In a November event on Twitter Spaces, Musk, addressing the issue of
companies pausing ads, said that he understands if advertisers "want to
give it a minute." He added that "the best way to see how things are
evolving (at Twitter) is just use Twitter."
Technology-focused publication The Information, citing details shared by
a top Twitter ad executive at a staff meeting on Wednesday, reported
that Twitter's fourth quarter revenue fell about 35% year over year due
to a slump in advertising.
Twitter posted a loss of $270 million in the three months ended June 30,
on total revenue of about $1.18 billion.
The Pathmatics estimates show continued upheaval in Twitter's main
revenue stream heading into 2023, led by a pullback from top consumer
brands.
Forward bookings, or agreements to lock in future ads, were also down
for January and February, according to research firm Standard Media
Index, which did not provide details.
Twitter is moving to reverse the advertiser exodus. It has introduced a
slew of initiatives to win back advertisers, offering some free ads,
lifting a ban on political advertising and allowing companies greater
control over the positioning of their ads.
"They're frankly really amazing incentives. Honestly, I've not seen that
type of incentive ever from any advertiser," said Molly Lopez, owner of
ad agency HITE Digital Miami.
In addition, Mark DiMassimo, founder of New York-based ad agency
DiMassimo Goldstein, said that "bargain basement" direct marketers and
political action committees - big spenders on Meta Platform Inc's
Facebook - may fill the advertising gap.
Coca-Cola Co halted spending in mid November, after purchasing an
estimated $1.1 million in Twitter ads earlier that month, while HBO
spending collapsed to approximately $38,000 in December from roughly
$1.1 million in November, Pathmatics found.
Coca-Cola declined to comment. HBO spokesperson Chris Willard did not
comment on the specifics of advertising spending, but said "we will be
assessing the platform under its new leadership and determine
appropriate next steps."
[to top of second column] |
Twitter logo and a photo of Elon Musk
are displayed through magnifier in this illustration taken October
27, 2022. REUTERS/Dado Ruvic/Illustration
Among consumer brands, Heinz ketchup maker Kraft Heinz Co and
Stouffers meal manufacturer Nestle SA stopped all advertising,
according to the Pathmatics estimates. Heinz and Nestle declined to
comment.
Mass retailer Target Corp and department store operator Kohls Corp
also skipped advertising on Twitter on Black Friday, one of the
biggest shopping days of the year, the estimates show. Kohls did not
return requests for comment.
However, Apple Inc and PepsiCo Inc increased spending, according to
Pathmatics.
Apple did not respond to requests for comment. PepsiCo declined to
comment.
Financial technology provider SmartAsset and Amazon.com Inc said
Pathmatics estimates showing an increase in advertising were
inaccurate. Amazon did not elaborate further and SmartAsset said the
figures were "inflated" without giving details. Pathmatics said "we
want to reiterate that our figures are just estimates."
BRAND SAFETY
Musk's arrival at Twitter exacerbated a drop in advertising that
began in September after Reuters reported that promotions appeared
alongside tweets soliciting child pornography.
Most of the companies stopped spending in November, the estimates
show, the same month that Musk restored suspended accounts and
released a paid account verification that resulted in scammers
impersonating corporations.
Telecommunications company AT&T Inc and pet food provider Mars Inc
slashed spending in September due to concerns about brand safety.
As the companies pulled back on Twitter, they maintained and in some
cases boosted advertising on Meta Platform Inc's Facebook and
Instagram and on short video app TikTok, according to Pathmatics.
Meta and TikTok did not immediately return requests for comment.
AT&T said it paused advertising in September because of "concerns
around content appearing next" to its ads. The company has been
talking to Twitter about its concerns, according to a person
familiar with AT&T's thinking.
Mars said its "suspension remains in effect."
Twitter has said to Reuters it is investing in child safety. The
platform is leaning on automation to moderate content and restrict
abuse-prone hashtags and search results in areas including child
exploitation.
Companies also scaled back on tweeting. As of January 19, Target and
Special K cereal maker Kellogg Co hadn't tweeted since October;
Coca-Cola and electronics retailer Best Buy Co Inc paused tweeting
in November, according to a Reuters review of the company's main
feeds.
Target, Best Buy and Kellogg did not return requests for comment.
(Reporting by Jessica DiNapoli in New York and Richa Naidu in
London; additional reporting by Sheila Dang in Dallas; Editing by
Vanessa O'Connell and Suzanne Goldenberg)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |