X (formerly Twitter) is on track for roughly $2.5 billion in ad revenue by 2023, sources familiar with the matter told Bloomberg.
According to the sources, revenues have been 600 million dollars in the quarter so far this year, and roughly the same is expected in the current quarter. Compared to quarterly advertising revenues of just over one billion dollars last year, we are therefore talking about a drop of as much as 40 per cent.
Advertisements are said to make up 70-75 per cent of total revenue. This points to a top line of around $3.4 billion in 2023, and includes revenue from the sale of data licenses and X Premium subscriptions. According to the news agency, the original goal of 3 billion dollars in advertising and subscription sales will not be reached.
– An incomplete picture
External estimates put subscription revenue at less than $120 million annually. In 2021, X (then Twitter) generated licensing revenue of $572 million.
– The figures give an incomplete picture of the entire business, as their sources do not provide accurate and comprehensive details. (…) We are a new global business under development, with multiple revenue streams. We’re not Twitter anymore, and we don’t measure ourselves according to old Twitter metrics – neither on revenue nor users, says operations director Joe Benarroch to Bloomberg.
X has not presented figures since Elon Musk took over in October 2022, but the company had over $5 billion in revenue the year before he took over. The then management, with Jack Dorsey at the helm, went out in early 2021 with a revenue target of 7.5 billion dollars.
Scares advertisers
Instead, Musk has implemented tough cost-cutting and scared advertisers with controversial posts to his 165 million followers. For example, in November he gave support to an anti-Semitic post, and companies such as Apple and Walt Disney reacted by pausing advertising on the platform.
The X owner later issued an apology and denied that he is anti-Semitic, but said at the Dealbook conference in late November that advertisers who boycotted the service could “go to hell” – likening the boycott to extortion.
At the same event, Musk acknowledged that failing ad revenue is a big problem, so big that it could actually end up with the company going under. According to the news agency, X has recently tried to make itself more independent of large advertisers by addressing itself more to small and medium-sized businesses.
A challenge – for both current and potential advertisers – may still be that Musk has let back in users who have previously been kicked out of X – which most recently happened to the well-known conspiracy theorist Alex Jones.
2023-12-13 10:32:55
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