Elon Musk is like sitting on a fire: Over 500 advertisers stop spending money on Twitter, about to pay interest on a $13 billion loan

More than 500 advertisers have paused spending on the social networking platform Twitter since Elon Musk took over last year, The Information reported. Twitter’s daily revenue on January 17 was down 40% from the same period a year ago. Twitter has not yet commented on the matter.

Since Musk took over Twitter last October, Twitter has been in unprecedented turmoil. In fact, within the first 28 days since billionaire Elon Musk officially took over Twitter, half of the top 100 advertisers stopped advertising on this social networking platform.

From 2020, these 50 companies contribute about $2 billion in Twitter’s advertising revenue. Media Matters said that in the first 10 months of 2022, these companies spent $750 million.

Several companies such as Chevrolet, Ford, and Chipotle have publicly announced that they are stopping advertising on Twitter. However, there are also quite a few other brands that “go away in silence” because according to Pathmatics analysis, they have stopped advertising for a “long period of time”.

Coca-Cola, Verizon, LinkedIn, and Meta are also on the list of 50 brands pulling advertising budgets out of Twitter.

Media Matters pointed to “direct outreach, controversy and warnings from media companies” as the reason the companies decided to stop advertising on Twitter.

Mars, the US-based pet food company, said it stopped advertising on Twitter at the end of September, before the social networking platform was bought by the world’s richest billionaire.

According to Insider, in a meeting shortly after billionaire Elon Musk took over the company, he tried to reassure top advertisers that Twitter was safe. At the same time, he also blamed activist groups “trying to destroy freedom of speech in the US” for “pressing advertisers”.

Since then, Twitter has found ways to lure advertisers back. According to the Wall Street Journal, Twitter is offering advertisers a new incentive. Specifically, Twitter is offering free ad space to brands who spend over $250,000 on the social networking platform between now and before February 28. The offer is the company’s latest attempt to solicit advertising from brands. Twitter recently launched a stimulus package, offering an additional $500,000 in advertising dollars to anyone who spends more than $500,000.

For a brand to be eligible for the new Twitter offer, it must use certain Twitter products such as the recently released sensitive keyword avoidance tool, which allows advertisers to create dark lists up to 1,000 keywords and avoid having their ads appear near tweets containing those words. Billionaire Musk said in December 2022 that he hopes Twitter will be able to break even by 2023.

The offer above can be used to run ads during Super Bowl week, a key sales period for Twitter. According to the WSJ, the Super Bowl is Twitter’s biggest revenue day of the year.

Twitter is facing financial pressure to re-engage advertisers, who stopped spending money after Musk took over the company. Many major brands have stopped advertising on Twitter because of Elon Musk’s approach to content moderation and concern that their ads will appear near controversial content.

Twitter CEO Elon Musk said in November that Twitter’s revenue has plummeted and the company is now losing $4 million a day. So it’s important to convince brands to return to Twitter. Not to mention, a recent report by the Financial Times said that billionaire Elon Musk will have to pay the first interest on a $ 13 billion bank loan to buy Twitter before and may have to pay it as early as in the future. this month. But with Twitter’s “fluctuating” financial situation, many people ask: Can Twitter pay this huge debt, or will it default and declare bankruptcy?

The source said, dealing with declining revenue, some of Twitter’s advertising executives are said to have met with partners privately to discuss a solution. Accordingly, the directors persuaded advertising partners to get used to the irregularities, unpredictable and uncertain of the Twitter boss.

The report comes as Twitter has been trying to create new revenue streams since Elon Musk took over as CEO. Late last year, the platform started charging $8 monthly for its Twitter Blue verification process.

Recently, the New York Times also reported that Twitter executives are considering an online auction to sell usernames from locked accounts for more revenue.

It is known that last month, Elon Musk announced that he planned to remove 1.5 billion inactive accounts from Twitter in order to “free up the name space.” However, so far his plan has not been announced. perform.

Source: Reuters, Bloomberg