NEW YORK/LONDON, Jan 20 (Portal) – Top advertisers on Twitter have slashed spending following the acquisition of Elon Musk, according to estimates compiled for Portal by research firm Pathmatics, in the latest shock to the company’s dominant revenue stream.
Pathmatics estimates that 14 of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took charge on Oct. 27. Four advertisers reduced their spend by 92% to 98.7% from the week before Musk’s acquisition through the end of the year.
Overall, the top 30 companies’ ad spend fell 42% to an estimated $53.8 million for November and December combined, according to Pathmatics, despite an increase in spend from six of them.
Pathmatics said the unreported Twitter ad numbers are estimates. The company bases its estimates on technologies that track ads on desktop browsers and the Twitter app, as well as those that mimic user experience.
However, the company said these estimates don’t take into account offers advertisers may receive from Twitter or promoted trends and accounts. “It’s possible that spend data is higher for some brands” if Twitter offers incentives, Pathmatics said in an email.
Twitter did not respond to multiple requests for comment.
In a November event on Twitter Spaces, while addressing the issue of companies pausing ads, Musk said he understands when advertisers “want to take a minute.” He added that “the best way to see how things are going[on Twitter]is to just use Twitter.”
Tech-focused publication The Information, citing details shared by a top Twitter advertising executive at a staff meeting on Wednesday, reported that Twitter’s fourth-quarter revenue fell about 35% year over year due to a slump in advertising.
Twitter reported a loss of $270 million on total revenue of approximately $1.18 billion for the three months ended June 30. Continue reading
Pathmatics estimates show continued upheaval in Twitter’s main revenue stream through 2023, led by a pullback by top consumer brands.
Advance bookings or agreements to block future ads were also down for January and February, according to research firm Standard Media Index, which did not provide details.
Twitter is trying to reverse the advertiser exodus. It has rolled out a number of initiatives to win back advertisers, offer some free ads, lift a ban on political advertising, and give companies greater control over where their ads are positioned.
“These are, frankly, really amazing incentives. Honestly, I’ve never seen this kind of incentive from an advertiser,” said Molly Lopez, owner of advertising agency HITE Digital Miami.
Additionally, Mark DiMassimo, founder of New York-based advertising agency DiMassimo Goldstein, said “bargain cellar” direct marketers and political action committees — big donors on Meta Platform Inc’s (META.O) Facebook — could fill the advertising void.
Coca-Cola Co (KO.N) halted spending in mid-November after buying an estimated $1.1 million in Twitter ads earlier in the month, while December HBO spending was down from about $1.1 million. Dollar tumbled to about $38,000 in November, Pathmatics noted.
Coca-Cola declined to comment. HBO spokesman Chris Willard would not comment on the details of the ad spend, but said, “We will evaluate the platform under their new leadership and determine appropriate next steps.”
Among consumer brands, Heinz ketchup maker Kraft Heinz Co (KHC.O) and Stouffers meal maker Nestle SA (NESN.S) ceased all advertising, Pathmatics estimates. Heinz and Nestle declined to comment.
Mass retailer Target Corp (TGT.N) and department store operator Kohls Corp (KSS.N) also skipped advertising on Twitter on Black Friday, one of the biggest shopping days of the year, estimates show. Kohls did not respond to requests for comment.
However, Apple Inc (AAPL.O) and PepsiCo Inc (PEP.O) increased their 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 Pathmatics’ estimates, which showed an increase in advertising, were inaccurate. Amazon didn’t elaborate, and SmartAsset said the numbers were “inflated,” without giving details. Pathmatics said, “We want to reiterate that our numbers are only estimates.”
BRAND SECURITY
Musk’s arrival on Twitter compounded a drop in advertising that began in September after Portal reported that promotions were appearing alongside tweets encouraging child pornography.
Most companies stopped spending in November, the estimates show, the same month Musk restored suspended accounts and released paid account verification that led scammers to impersonate the company.
Telecom company AT&T Inc (TN) and pet food retailer Mars Inc cut spending in September amid brand safety concerns.
As the companies pulled out of Twitter, Pathmatics said they retained, and in some cases increased, advertising on Meta Platform Inc’s (META.O) Facebook and Instagram and on short-video app TikTok.
Meta and TikTok did not immediately respond to requests for comments.
Ad spend by the top 30 Twitter advertisers in the last four months of 2022
AT&T said it suspended advertising in September over “concerns about the content that appears alongside its ads.” According to a person familiar with AT&T’s mindset, the company has spoken to Twitter about its concerns.
Mars said his “suspension remains in effect.”
Twitter has told Portal that it is investing in child safety. read more The platform relies on automation to moderate content and limit abuse-prone hashtags and search results in areas like child exploitation. Continue reading
Companies have also scaled back tweeting. As of Jan. 19, cereal maker Kellogg Co (KN) had not tweeted from Target and Special K since October; Coca-Cola and electronics retailer Best Buy Co Inc (BBY.N) suspended tweeting in November, according to a Portal review of the company’s main feeds.
Target, Best Buy and Kellogg have not responded to requests for comment.
Reporting by Jessica DiNapoli in New York and Richa Naidu in London; additional reporting by Sheila Dang in Dallas; Edited by Vanessa O’Connell and Suzanne Goldenberg
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