Ad spending on Twitter falls by over 70% in December: Report

Advertising spends on microblogging platform Twitter dropped by 71% in December, according to a report by advertising research firm Standard Media Index (SMI). The drop is attributed to top advertisers slashing their spending on the social-media firm since Elon Musk's takeover in October last year, the report said.  

The SMI data further showed that ad spending on Twitter in November fell 55% from previous year, despite the third quarter is generally seen as a time of higher ad spending with brands promoting their products during the holiday season.  

Ad sales account for about 90% of Twitter's revenue. Estimates provided by digital marketing platform Pathmatics in January as reported by Reuters, indicate that 14 of the top 30 Twitter advertisers suspended all advertising on the service when Musk assumed leadership on 27 October. From the week before Musk's acquisition to the end of the year, four advertisers cut their spending by between 92% and over 98%, it said.  

For example, after spending an estimated $1.1 million on Twitter advertisements earlier in October 2022, beverage brand Coca-Cola stopped investing in the middle of the month, while television network HBO's spending fell to just $38,000 in December from $1.1 million in November, according to Pathmatics. Other consumer brands such as Nestle and Heinz ketchup manufacturer Kraft Heinz also halted all advertising.   

Black Friday, considered  one of the busiest shopping days of the year, also saw a paucity of Twitter advertising from mass merchant Target and department store operator Kohls. Additionally, companies reduced their tweeting, said the report, Coca-Cola and electronics retailer Best Buy stopped tweeting in November, while Target and Kellogg, the creator of Special K cereal, had stopped since October.  

Corporate advertisers have fled largely due to pressure from powerful civil rights organisation groups, namely the Anti-Defamation League (ADL) and National Association for the Advancement of Colored People (NAACP). The groups began a campaign against Twitter following Elon Musk’s decision to reinstate Donald Trump on to the platform in November last year.   

Musk had also blamed the activist groups for pressuring advertisers to pull ads on social media platform, especially after NAACP President Derrick Johnson issued a statement in November stating “any advertiser still funding Twitter should immediately pause all advertising”. 

Since Musk took over Twitter in October last year, the company axed more than 3,000 staff and has reinstated several controversial accounts to the platforms. The company also introduced a paid verification feature that resulted in scammers impersonating companies on Twitter. 

Twitter's fourth-quarter revenue ended December 31, 2022, fell about 35% year-over-year due to a slump in advertising, technology news site, The Information reported on January 18, citing details shared by Twitter’s global sales and marketing chief Chris Riedy, who also said that the company is hoping to generate $732 million in revenue in the first quarter of 2023, which would be a drop of 39% from the first quarter of last year.