Elon Musk’s Twitter deal was met with swift criticism. One of the four biggest advertising agencies, IPG Megabrands, urged their clients to halt advertising Twitter just days after the acquisition. Along with these other businesses, paid advertisements on the platform have been suspended by Pfizer, General Motors, and Volkswagen.
Ninety-two percent or so of Twitter’s overall revenue in 2021 came from advertising. If there was any doubt before, it is now evident that Musk must wean Twitter off its dependence on advertising revenue in order for his vision for the company to succeed.
At Twitter, Elon Musk has had a very busy week. His most active users will now need to pay a monthly fee, and he has sacked half of his workers and told the other employees they may no longer work remotely.
Also Read: Ad Spending on Twitter Falls by Over 70%
He has also criticized advertising. Elon Musk in his tweet on Friday claimed that Twitter had experienced a “massive drop in revenue” as more advertisers choose to stay away from what can only be called a turbulent transition.
It’s important to note that overall spending on digital advertising has decreased as the economy faces its own uncertainty. Additionally, it appears that everything is being done to divert attention from the mass layoff issue.
Musk tweeted about advertising again later though. This time, it was in response to a request that Musk “name and shame” companies who have halted their advertising. He tweeted, “A thermonuclear name & shame is exactly what will happen if this continues.”
It appears that 50 out of the top 100 advertisers on Twitter have halted advertising on the platform. These 50 advertisers have spent about $2 billion on Twitter advertisements since 2020, and more than $750 million only in 2022, according to research from Media Matters for America.
Also Read: What Does Twitter 200 Million User Email Leak Actually Mean?
Based on the report, which was released on Tuesday, seven new companies have reduced their advertising to nearly nothing. Since 2020, these businesses have paid Twitter over $255 million for advertising. Chevy, Chipotle Mexican Grill, Ford, Kyndryl, Jeep, Merck & Co., and Novartis AG all made announcements concerning the suspension of Twitter advertisements, or it was rumored and confirmed that they had done so.
The others stopped using the site to advertise for a significant period of time following direct outreach, controversies, and media buyers.” The day following an account pretending to be from Eli Lilly and Co. posted, “We are excited to announce insulin is free now,” the pharmaceutical business ceased running advertisements on Twitter.
The post was left up for hours despite Eli Lilly’s request for Twitter to remove it because the company’s staff was overworked as a result of recent firings and resignations. Eli Lilly’s shares fell shortly after the tweet received thousands of likes and hundreds of retweets.
Advertisers have stopped spending on Twitter advertisements because they don’t want to pay for ads that would randomly start appearing next to violent or racist content. They want assurances that the situation won’t worsen into an even worse swamp than it already is.
Musk hasn’t taken any action to reassure them that it won’t. Instead, he simply continues to use his “management by chaos” approach. He believes it works for him, however, brand stability and predictability are what advertisers desire.
I am a law graduate from NLU Lucknow. I have a flair for creative writing and hence in my free time work as a freelance content writer.