Recent reports reveal that 625 of the top 1,000 Twitter advertisers have paused their ads on the platform as of January 2023.
Big companies such as Pfizer, General Motors, Ford, Audi, Coca-Cola, Unilever, etc, have all paused their ads. Some of these companies had to pause their ads after Musk acquired the company, with the intention to make it a free speech platform which he eventually did.
Some other major advertisers expressed disapproval of Musk’s approach to content moderation, including the reinstatement of previously banned accounts and the dismissal of the company’s key executives responsible for curtailing hate speech.
Many companies spotted it as a risk to their business, especially after a sudden surge of slurs and hateful comments were reported on the platform immediately after the Tesla billionaire took over.
Giant Automaker Ford disclosed that it won’t be promoting its products on Twitter, citing concerns over changes Musk has implemented on the platform. A spokesperson at Ford revealed that the company will continue to evaluate the direction of the platform under the new ownership.
Also, clients of Group M, the world’s most prominent ad-buying firm, have reduced their ads spending since Musk’s takeover, stating that the company has become a high risk.
Following the pause of ads by these firms, Twitter’s advert revenue has decreased by 40% compared to last year. The company’s fourth quarter revenue fell about 35% year over year to $1.025 billion.
Investors King understands that following the decline of ads on the platform which has affected the company’s revenue, Musk has tried to woo brands back by offering advertisers $500,000 in free ads as long as they spend at least $500,000.
Musk persuading advertisers to return to the platform is critical, as almost 90% of Twitter’s revenue comes from ads. Advertising accounted for Twitter’s $5.1 billion revenue in 2021, but has seen a downturn, which was exacerbated by Musk’s acquisition bid in 2022.