According to a well followed estimate released on Tuesday, Twitter’s revenue from advertising will decline by 28% in 2023 as the site suffers under Elon Musk’s control.
As trust in the platform declines, analysts at Insider Intelligence said they were reducing their earlier projection of worldwide sales of $4.74 billion by more than a third to $2.98 billion.
Advertisers’ lack of trust in Musk is “the largest challenge with Twitter’s ad business,” according to Jasmine Enberg, chief analyst at Insider Intelligence.
To rebuild advertiser confidence and bring back ad dollars, she continued, “Twitter needs to separate Musk’s personal brand from the company’s corporate image.”
Musk’s tumultuous takeover of Twitter has already seen several major advertisers suspend their activity on the platform after the Tesla tycoon loosened the reins on content moderation and laid off over half of a 7,000 strong workforce.
According to research Pathmatics, in January fourteen of the top 30 advertisers on Twitter stopped advertising on the platform since Musk took charge on October 27.
Elon Musk To Lays Off Half Of Twitter’s Employees
Insider Intelligence noted that Musk’s efforts to build up a subscription service “won’t make up for the lost ad revenue.”
Musk’s leadership has also cooled Twitter’s remaining users, with Insider Intelligence forecasting a two-minute drop in time spent on the platform to 34 minutes per day — TikTok’s users stay on the app for almost an hour.
Insider Intelligence said the drop in usage was due to the proliferation of hateful content and technical glitches on the platform, as well as a failure to expand into social video and pose a challenge to TikTok.
“Twitter engagement is still heavily dependent on the news cycle,” said Engberg. “The takeover saga caused a spike in time spent in 2022 that has now dissipated, as users have lost interest in Musk’s antics.”
Musk is set to speak at a major marketing conference in Miami on April 18 in a likely effort to woo back major advertisers to Twitter.
Musk bought Twitter for $44 billion, though he has since written down the company’s value to half that.
AFP
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