The blue bird sees red. According to Insider Intelligence, Twitter’s annual revenue is expected to plunge by almost a third this year. The San Francisco company, which generates most of its revenue from advertising, is set to earn less than $3 billion in 2023, compared to $4.14 billion in 2022, or 28% less.
This tumble would, moreover, follow the very strong loss of income in 2022. According to the Wall Street Journal, which quotes a statement sent to Twitter investors, the social network’s turnover has collapsed by 40% in 2022 compared to 2021, when it amounted to 5 billion dollars. The situation is even worse under the leadership of Elon Musk: the company generated 70% less revenue in December 2022 than in December 2021. In the summer of 2022, after the proposed takeover of the social network by the boss of Tesla, and the first twists, Insider Intelligence had already revised downwards its forecast for 2023, to 4.74 billion. The experts then still counted on growth for the blue bird platform.
But since then, the economic context has deteriorated and many predictions about the flight of advertisers have come to fruition.
Leakage of advertisers
« The biggest problem is that advertisers don’t trust Musk “Summarizes analyst Jasmine Enberg, quoted in a press release. ” Twitter must manage to separate the perception of Musk and his personal brand image from that of the company to regain their confidence and bring them back “, she adds.
Elon Musk has relaxed content moderation, essential for creating an environment considered “safe” by brands, who do not want to be associated with so-called “toxic” content. The boss dismissed with a vengeance, reducing the group’s workforce from 7,500 to less than 2,000 employees. And he let back many users who had been banned because of hateful or misinformation messages. According to Pathmatics, in January half of the 30 main advertisers on Twitter had stopped buying advertising space there since the takeover at the end of October. Brands are hesitant to spend on a platform “ where chaos, arbitrary change and uncertainty reign », explained Jasmine Enberg.
According to analyzes by Sensor Tower, 70 of Twitter’s 100 largest historical advertisers no longer spent a dollar on the platform at the end of February, while the social network depended on online advertising for more than 90% of its turnover. in 2021.
Musk looking for a new business model for the network
Jasmine Enberg doesn’t think the new “Twitter Blue” subscription will make up for lost revenue. This certification, which gives certain additional options to users against 8 euros per month, is seen by the billionaire as the solution to put Twitter back on the path to growth. But barely three months after its launch, the number of subscribers is already stagnating, and some of the first believers are starting to cancel. The Information indicated in mid-February, from internal sources, that the service had only convinced 290,000 subscribers worldwide (including more than half in the United States). This mass of subscribers could bring the company $28 million in annual revenue, a dramatically low total compared to its 2021 revenue of billions of dollars.
« The blue tick is no longer a guarantee of credibility “, since anyone can pay for it, notes the analyst. ” It represents having influence on a platform whose cultural relevance is deteriorating, and support for Musk. Individuals and organizations that had previously been authenticated have no reason to pay, and many users don’t want to appear to support Musk ».
The multi-billionaire is due to speak at a conference of marketing professionals in Miami on April 18.
He has already expressed his optimism and his ambitions in a letter sent to his teams on March 27. Elon Musk says he glimpses a difficult but clear path towards a valuation of the group around 250 billion dollars (against 20 billion today), without mentioning a deadline. ” But now that advertisers are coming back, it looks like we’re going to break even in Q2. 2023, said the CEO and majority shareholder of Twitter.
(With AFP)
