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Twitter’s U.S. Ad Sales Plunge 59% as Woes Continue

In internal forecasts, the company projected that ad sales would keep declining, handing a tough challenge to its new chief executive.

Elon Musk recently said Twitter’s advertising business was on the upswing. “Almost all advertisers have come back,” he asserted, adding that the
social media company could soon become profitable.

But Twitter’s U.S. advertising revenue for the five weeks from April 1 to
the first week of May was $88 million, down 59 percent from a year
earlier, according to an internal presentation obtained by The New York
Times. The company has regularly fallen short of its U.S. weekly sales projections, sometimes by as much as 30 percent, the document said.

That performance is unlikely to improve anytime soon, according to the documents and seven current and former Twitter employees.

Twitter’s ad sales staff is concerned that advertisers may be spooked by a
rise in hate speech and pornography on the social network, as well as more
ads featuring online gambling and marijuana products, the people said. The company has forecast that its U.S. ad revenue this month will be down at
least 56 percent each week compared with a year ago, according to one
internal document.


These issues have been inherited by Linda Yaccarino, the NBCUniversal
executive whom Mr. Musk named Twitter’s chief executive last month. She
started her new job on Monday.

On a Twitter Space audio event on Monday, Mr. Musk said advertisers in
Europe and North America have put “extreme pressure” on the company,
leading “half our advertising” to disappear. “They are trying to drive
Twitter bankrupt,” he said.

He did not respond to a request for comment and Ms. Yaccarino, through a spokesman, declined to comment.

Linda Yaccarino, wearing a chartreuse dress, holds a wireless microphone
in one hand and a pair of glasses in the other while speaking to a group.
Linda Yaccarino, Twitter’s new chief executive, has inherited declining ad sales and other issues.Credit...Cindy Ord/Getty Images
Linda Yaccarino, wearing a chartreuse dress, holds a wireless microphone
in one hand and a pair of glasses in the other while speaking to a group.

The state of Twitter’s advertising is crucial because ads have long made
up 90 percent of the company’s revenue. After Mr. Musk bought Twitter for
$44 billion in October and took the company private, he vowed to build
“the most respected ad platform.” But he quickly alienated advertisers by firing key sales executives, spreading a conspiracy theory on the site and welcoming back barred Twitter users.


In response, several large ad agencies and brands, including General
Motors and Volkswagen, paused their ad spending on Twitter. Mr. Musk has
said Twitter was on track to post $3 billion in revenue in 2023, down from
$5.1 billion in 2021, when it was a public company.
Inside Elon Musk’s Twitter

A 2024 Debut Flop: Hosting Ron DeSantis in a Twitter livestream to
announce his presidential run was supposed to be a crowning moment for
Elon Musk. But the event turned instead into a series of technical
glitches.
New C.E.O.: Linda Yaccarino, NBCUniversal’s advertising chief, is set
to become the face of Twitter after she was selected as its chief
executive by Musk.
Blue Check Marks: The removal of check mark icons from the profiles of thousands of celebrities, politicians and journalists in April was one of
the most visible indicators of how Musk is changing the company.
A Changing Landscape: The elimination of the check marks, which historically served as a means of identifying public agencies, has
convulsed Twitter as information on the platform becomes increasingly unreliable.

Twitter’s valuation has since plunged. In March, Mr. Musk said the company
was worth $20 billion, down more than 50 percent from the $44 billion he
paid for it. Last week, the mutual funds giant Fidelity, which owns shares
in Twitter, valued the company at $15 billion.

Twitter feels increasingly “unpredictable and chaotic,” said Jason Kint,
chief executive of Digital Content Next, an association for premium
publishers. “Advertisers want to run in an environment where they are comfortable and can send a signal about their brand,” he added.

Some of Twitter’s biggest advertisers — including Apple, Amazon and Disney
— have been spending less on the platform than last year, three former and current Twitter employees said. Large specialized “banner” ads on
Twitter’s trends page, which can cost $500,000 for 24 hours and are almost always bought by large brands to promote events, shows or movies, are
often going unfilled, they said.

Twitter has also run into public relations snafus with big advertisers
like Disney. In April, Twitter mistakenly gave a gold check mark — a badge meant to signify a paying advertiser — to the @DisneyJuniorUK account,
which Disney doesn’t own. The account posted racial slurs, leading Disney officials to demand from Twitter an explanation and assurances that it
wouldn’t happen again, two people with knowledge of the situation said.


Six ad agency executives who have worked with Twitter said their clients continued to limit spending on the platform. They cited confusion over Mr. Musk’s changes to the service, inconsistent support from Twitter and
concerns about the persistent presence of misleading and toxic content on
the platform.

Last month, for instance, a picture that appeared to show an explosion
near the Pentagon — which artificial intelligence experts identified as a synthetically generated image — was shared by dozens of Twitter accounts
and briefly caused the stock market to tumble.

Some advertisers also continue to worry about Mr. Musk’s tweets. Last
month, he posted several times comparing the billionaire financier George Soros, a frequent target for conspiracy theorists, to the “X-Men” comic
book villain Magneto. Ted Deutch, the chief executive of the American
Jewish Committee, noted that both Mr. Soros and Magneto are Holocaust survivors, and that “the lie Jews want to destroy civilization has led to
the persecution of Jewish people for centuries.”

“Musk should know better,” he said.

Last week, Ella Irwin, Twitter’s head of trust and safety, the division
that oversees content moderation, and AJ Brown, the head of brand safety
and ad quality, resigned, three current and former employees said. Ms.
Irwin and Mr. Brown did not respond to requests for comment.

Mr. Musk has promoted new tools, known as adjacency controls, so
advertisers can keep their ads away from tweets containing specific
keywords or posts by certain users. Some advertisers are using the tools
to keep their content away from Mr. Musk’s tweets, four people familiar
with the situation said.

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Still, some marketers are returning to the platform. GroupM, a media-
buying organization that is part of the ad giant WPP, informed employees
in May that it was removing its “high risk” flag on Twitter and guiding
clients to return, at their discretion, to business as usual, two people familiar with the decision said. IPG, another large advertising company,
has recommended that clients proceed with caution when dealing with
Twitter, after suggesting last fall that they temporarily pause their
spending.
Image
Elon Musk gets into a black car.
Last month, Elon Musk posted several tweets attacking the billionaire
financier George Soros, a frequent target for conspiracy theorists.Credit...Tingshu Wang/Reuters
Elon Musk gets into a black car.

Twitter is exploring ways to make it easier for advertisers to buy space
on the platform, testing an automated system outside the United States to
make deals, two people familiar with the arrangement said. Insider earlier reported the move.

The company is experiencing ad growth in areas that it once shied away
from or prohibited, including online gambling and marijuana products. In
one week last month, four of Twitter’s top 10 U.S. advertisers were online gambling and fantasy sports betting companies, according to one
presentation. Twitter has also started allowing ads for cannabis
accessories, including “bongs, vapes, rolling paper,” as well as erectile dysfunction products and services, according to internal emails.

Adult content, which is permitted on Twitter, has become a concern among
the company’s sales staff. When some employees tried to drum up interest
from advertisers for Mother’s Day, they found that potential sponsored
search terms, like “MomLife,” surfaced pornographic videos, according to
two people familiar with the conversations.

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These are issues that some advertisers hope Ms. Yaccarino will solve.

Dave Campanelli, the chief investment officer of Horizon Media, said he
was hoping for change after Ms. Yaccarino started, because media agencies
like his struggled to maintain contact with Twitter last fall after Mr.
Musk arrived.

“For a period, we weren’t even sure who to get on the phone with to talk
to,” he said. “With Linda coming in, that could change that in a big way.”

He acknowledged that Twitter’s mercurial boss and volatile environment
might pose a challenge for Ms. Yaccarino.

“It’s a tall order,” Mr. Campanelli said.

Benjamin Mullin contributed reporting. Sheelagh McNeill contributed
research.
Twitter’s Woes
Elon Musk Appoints Linda Yaccarino Twitter’s New Chief
May 12, 2023
Elon Musk’s Event With Ron DeSantis Exposes Twitter’s Weaknesses
May 24, 2023
Twitter Keeps Missing Its Advertising Targets as Woes Mount
Dec. 2, 2022

Ryan Mac is a technology reporter focused on corporate accountability
across the global tech industry. He won a 2020 George Polk award for his coverage of Facebook and is based in Los Angeles. @RMac18

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