Twitter’s Ad Volume Dropped By Nearly 50% In November

Twitter was already facing several challenges with advertisers even before Elon Musk acquired the company. Twitter was facing strong competition from larger and faster growing social media platforms, Also, advertisers emphasize on enhanced targeting with business outcomes and a sluggish ad economy have also imperiled their revenue forecasts. To date, Elon Musk’s takeover has only exacerbated its already precarious ad revenue means.

A recent ad spending report from Standard Media Index (SMI), found in November 2022, the first full month of Elon Musk’s takeover, Twitter’s ad spending dropped by 46% compared to the previous year. More ominously, SMI also found marketers that had “pre-booked” ads on the social media platform for the final two months of 2022 had pulled back on their commitment. In addition, SMI reports a smaller amount of future ad bookings on Twitter for January and February 2023 compared to previous years. (SMI tabulates actual ad agency invoicing data from all major holding companies and most major independents, accounting for about 95% of national brand ad spend.)

In November, SMI found almost 31% of total the ad dollars originally earmarked for Twitter had pulled back. SMI noted the sudden loss of ad dollars originally committed to a media outlet is unusual, with the ad boycott Facebook faced for one month a few years ago being the only recent comparable example. The analysis also found TikTok had benefited the most from the marketers pulling out of Twitter. Twitter’s share of voice among competitive social media platforms (TikTok, Facebook, Instagram, Snap and Pinterest) in November dropped to 7%, compared to 10% in October and 12% in September.

Twitter’s steep fall-off follows slight year-over-declines that was happening prior to Musk’s acquisition, finalized on October 27. For example, year-over-year Twitter’s ad spend dropped by -12% in October, -15% in September, -5% in August and -1%, The year-over-year decline from July to October is comparable to ad spending trends impacting other ad supported media in the second half of 2022, as marketers expressed concerns about macroeconomic headwinds.

The number of blue-chip advertisers pulling out of Twitter has been well documented; marketers have expressed concerned about the sizable employee layoffs impacting day-to-day operations. Marketers have also been concerned about brand safety with the growing amount of disinformation and hate posts now appearing. Furthermore, marketers want stability which has been severely lacking with the new mercurial and attention seeking owner at Twitter.

There are other reasons however why Twitter has never been able to receive the ad dollars that other digital media platforms. A recently released report from Forrester entitled “Twitter Isn’t Canceled; It’s Downgraded” revealed the other challenges the micro-blogger is facing besides new ownership and policy changes. As Forester points out Twitter with posts from politicians, entertainers and late breaking news maintains its cultural relevance with users and is far more familiar than rival Mastodon but not with Madison Avenue.

The report found Twitter has become a low priority in the ad community. Forrester points out only 1.3% of digital ad dollars in 2022 were allocated to Twitter. One reason for lack of advertiser support is Twitter’s low reach. While Facebook reaches 63% and Instagram 40% of U.S. adults each week, Twitter lags behind at 22%. Also, half of U.S. online adults have never used Twitter.

In canvassing advertising executives Forrester found Twitter’s performance-based ad-products lagged behind the much larger Facebook and the faster-growing TikTok (especially with young adults) among other ad supported options marketers now have. Advertisers point out Twitter’s direct-response ads fall short with the requirements needed to reach lower funnel attributes such as brand preference and purchase. Hence, marketers use Meta and other larger digital media channels to achieve those goals. Twitter is better suited for such upper funnel goals as awareness and product consideration.

Advertisers also told Forrester that Twitter’s targeting and personalization capabilities, which have become important in today’s marketplace is embryonic at Twitter. Advertisers are far more likely to use Facebook and other digital platforms to “hyper-targe” users. Furthermore, as a flood of marketers pulled out, Twitter users were exposed to a greater amount of irrelevant ad messages.

Advertising has been the primary revenue source for Twitter. In 2021 Twitter reported $5.08 billion in total revenue, with advertising accounting for $4.51 billion. At the time of his acquisition, Musk told Wall Street he projects revenue to reach $26.4 billion by 2028, with subscription revenue accounting for $10 billion. These bullish forecasts come at a time when Twitter has recorded a profit in only two of the past years.

Based on recent trends and Madison Avenue’s attitude it is doubtful Musk will be able to achieve his revenue goals for Twitter.