Twitter is projected to experience a significant decline in advertising revenue, with a forecasted drop of 28 percent for 2023. This alarming prediction highlights the challenges the platform faces under Elon Musk’s leadership.
In a revised report, analysts from Insider Intelligence have cut their previous global revenue forecast from $4.74 billion (approximately Rs. 38,900 crore) to $2.98 billion (around Rs. 24,500 crore), reflecting eroding trust among advertisers in the platform.
“The main issue with Twitter’s advertising approach is the lack of trust in Musk by advertisers,” stated Jasmine Enberg, principal analyst at Insider Intelligence.
She further emphasized the need for Twitter to separate Musk’s personal brand from its corporate image in order to restore advertiser confidence and recover lost advertising revenue.
Since Musk’s controversial acquisition of Twitter, several major advertisers have halted their campaigns, primarily due to his relaxed content moderation policies and significant layoffs, which saw more than half of the company’s 7,000 employees let go.
Research by Pathmatics indicates that by January, fourteen out of Twitter’s top 30 advertisers had ceased their advertising initiatives on the platform since Musk took control on October 27.
According to Insider Intelligence, Musk’s attempts to develop a subscription service will not compensate for the downturn in advertising income.
The impact of Musk’s leadership has also been felt by Twitter’s active user base, with the firm predicting a decrease in average time spent on the platform from 36 minutes to 34 minutes per day. In contrast, TikTok users reportedly engage with the app for nearly an hour.
This decline in engagement is attributed to the rise of offensive content, technical difficulties, and a failure to diversify into the social video space to compete with TikTok.
“User interaction on Twitter is still largely influenced by current events,” Engberg explained. “The spike in engagement during the takeover saga in 2022 has faded, as users are increasingly disinterested in Musk’s behavior.”
Musk is scheduled to address a prominent marketing conference in Miami on April 18, potentially aiming to win back significant advertisers.
Having purchased Twitter for $44 billion (approximately Rs. 3,61,200 crore), Musk has subsequently reduced the company’s valuation by half.
