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See what Twitter lost in advertising revenue in the final months of 2022

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NEW YORK/LONDON, Jan 19 (Reuters) – Twitter’s top advertisers slashed spending following its acquisition of Elon Musk, according to estimates compiled for Reuters by research firm Pathmatics, in the latest shock to the top revenue earner. from the company.

Fourteen of Twitter’s top 30 advertisers stopped all advertising on the platform after Musk took office on Oct. 27, according to estimates by Pathmatics. Four advertisers reduced spend between 92% and 98.7% from the week before the Musk acquisition through the end of the year.

Overall, advertising spend for the top 30 companies fell 42% to an estimated $53.8 million in November and December combined, according to Pathmatics, despite an increase in spending for six of them.

Pathmatics said the previously unreleased Twitter advertising numbers are estimates. The company bases its estimates on technologies that track ads in desktop browsers and in the Twitter app, as well as those that mimic the user experience.

But the company said those estimates don’t take into account the business advertisers may receive from Twitter, or trends and promoted accounts. “It’s possible that spending data will be higher for some brands” if Twitter offers incentives, Pathmatics said in an email.

Twitter did not respond to multiple requests for comment.

At a November event on Twitter Spaces, Musk, addressing the issue of companies pausing ads, said he understands if advertisers “want to take a minute.” He added that “the best way to see how things are evolving (on Twitter) is just to use Twitter”.

Technology-focused publication The Information, citing details shared by a top Twitter ad executive at a staff meeting on Wednesday, said Twitter’s fourth-quarter revenue was down about 35% year-over-year due to a decline in in advertising.

Twitter posted a loss of $270 million for the three months ended June 30, on total revenue of about $1.18 billion. see more information

Pathmatics estimates show continued unrest in Twitter’s top revenue stream in 2023, led by a pullback from top consumer brands.

Advance bookings, or agreements to block future listings, also fell in January and February, according to research firm Standard Media Index, which did not provide details.

Twitter is moving to reverse the exodus of advertisers. He introduced a series of initiatives to win back advertisers, offering some free ads, lifting the ban on political advertising and allowing companies greater control over the placement of their ads.

“These are frankly incredible incentives. Honestly, I’ve never seen these types of incentives from any advertiser,” said Molly Lopez, owner of advertising agency HITE Digital Miami.

In addition, Mark DiMassimo, founder of New York-based ad agency DiMassimo Goldstein, said that direct marketers and political action committees — big spenders on Facebook from Meta Platform Inc (META.O) — can fill out the advertising gap.

Coca-Cola Co (KO.N) halted spending in mid-November after buying about $1.1 million worth of Twitter ads earlier that month, while HBO’s spending dropped to approximately $38,000 in December, from about $1.1 million in November, Pathmatics discovered.

Coca-Cola declined to comment. HBO spokesman Chris Willard declined to comment on the details of advertising spend, but said “we will evaluate the platform under its new leadership and determine appropriate next steps.”

Among consumer brands, Heinz ketchup maker Kraft Heinz Co(KHC.O) and Stouffers meal maker Nestlé SA (NESN.S) have stopped all advertising, according to estimates by Pathmatics. Heinz and Nestle declined to comment.

Mass retailer Target Corp (TGT.N) and department store operator Kohls Corp (KSS.N) also stopped advertising on Twitter on Black Friday, one of the biggest shopping days of the year, estimates show. Kohls did not return requests for comment.

However, Apple Inc (AAPL.O) and PepsiCo Inc (PEP.O) have 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 (AMZN.O) said that Pathmatics’ estimates showing an increase in advertising were inaccurate. Amazon did not provide further details and SmartAsset said the numbers were “inflated” without elaborating. Pathmatics said that “we want to reiterate that our numbers are estimates only.”

BRAND SAFETY

Musk’s arrival on Twitter exacerbated an advertising slump that began in September after Reuters reported that the promos appeared alongside tweets soliciting child pornography.

Most companies stopped spending in November, estimates show, the same month that Musk restored suspended accounts and released a paid account verification that resulted in scammers posing as corporations.

Telecommunications company AT&T Inc (TN) and pet food supplier Mars Inc cut spending in September due to brand safety concerns.

As companies have pulled back on Twitter, they have maintained and, in some cases, boosted advertising on Meta Platform Inc’s Facebook and Instagram (META.O) and short video app TikTok, according to Pathmatics.

Meta and TikTok did not immediately return requests for comment.

Ad spend from Twitter’s top 30 advertisers in the last four months of 2022

AT&T said it stopped advertising in September because of “concerns about content appearing alongside” its ads. The company has been speaking to Twitter about its concerns, according to a person familiar with AT&T’s thinking.

Mars said its “suspension remains in effect”.

Twitter told Reuters it is investing in child safety. read more The platform relies on automation to moderate content and restrict abuse-prone hashtags and search results in areas that include child exploitation. see more information

Businesses also reduced tweeting. As of January 19, Target and Special K cereal maker Kellogg Co (KN) have not tweeted since October; Coca-Cola and electronics retailer Best Buy Co Inc (BBY.N) stopped tweeting in November, according to a Reuters analysis 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

Our Standards: Thomson Reuters Trust Principles.

Jessica DiNapoli

Thomson Reuters

New York-based reporter covering US consumer products from paper towels to packaged foods, the companies that make them and how they are responding to the economy. Previously reported on corporate boards and distressed companies.

richa naidu

Thomson Reuters

London-based reporter covering retail and consumer goods, analyzing trends including coverage of supply chains, advertising strategies, corporate governance, sustainability, policy and regulation. Previously, he has written about US-based retailers, major financial institutions and covered the Tokyo 2020 Olympics.

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