Twitter’s dismal performance with advertisers has worsened under the ownership of Elon Musk. Musk’s changes, including a name change to X and a rollback of site rules, along with prioritizing engagement for paying users and his controversial personality, have contributed to Twitter’s bleak outlook.
In fact, Musk now claims that Twitter’s ad revenue is down 60%. While he often blames various enemies for his own failures, such as the Anti-Defamation League, Musk himself has been a major hindrance to Twitter’s profitability.
The new CEO, Linda Yaccarino, has been unable to quickly resolve Twitter’s advertising issues. Musk and Yaccarino are now indicating a shift away from Twitter’s own advertising platform and sales efforts, opting to rely on third-party vendors for ad space auctions.
Twitter has already started selling inventory through the Indian ad marketplace InMobi and has recently struck a deal with Google to sell ad space as well.
Twitter’s new ad strategy is to outsource the job if they can’t sell ads themselves.
Why Twitter needs Google
Elon Musk has always had a distaste for advertising. Despite publicly expressing his hatred for advertising and avoiding paid marketing for Tesla, his acquisition of Twitter, which heavily relies on ad revenue, made him responsible for a massive ad business. Prioritizing the subscription offering X Premium and hiring Yaccarino, Musk hoped she would bring strong client relationships to help boost ad sales.
Even before Musk took charge, Twitter was a challenging platform for advertisers, especially those who wanted to avoid controversial discussions or political debates. Musk’s leadership has further strained those relationships.
According to Kelsey Chickering, a principal analyst at Forrester, Twitter has never been a significant part of advertisers’ media plans, representing only 1.3% of digital advertising in 2022. The turmoil following Musk’s takeover, including uncertain moderation policies and inconsistency in account managers, has made it easy for top advertisers to switch to other platforms.
Chickering believes that Twitter’s struggle to attract advertisers, as evidenced by the Google partnership, could have negative consequences. As the ad experience deteriorates for users, competitors have an opportunity to capture user attention and advertiser budgets.
Max Willens, a senior analyst at Insider Intelligence, agrees that the Google partnership indicates Twitter’s ongoing struggle to generate advertising revenue through direct sales. However, he believes it is more about attracting small advertisers and strengthening X’s base, rather than resolving issues with existing advertisers.
