Here’s what Twitter lost in ad revenue in the final months of 2022


NEW YORK/LONDON, Jan 19 (Reuters) – Twitter’s top advertisers have cut spending since Elon Musk took over, according to estimates compiled for Reuters by research firm Pathmatics, in the latest blow to the company’s dominant source of revenue.

Pathmatics estimates that since Musk took office on October 27, 14 of the top 30 advertisers on Twitter have stopped all advertising on the platform. The four advertisers cut spending between 92% and 98.7% in the week leading up to Musk’s acquisition by the end of the year.

Overall, ad spending by the top 30 companies fell nearly 42% to $53.8 million in November and December, despite increases in six of them, according to Pathmatics.

Pathmatics said the previously unreported figures on Twitter ads are estimates. The company bases its calculations on technologies that track ads in desktop browsers and the Twitter app, as well as mimic the user experience.

But the company said those estimates don’t take into account deals advertisers can get from Twitter or promoted trends and accounts. Pathmatics said in an email that if Twitter offers incentives, “spend information may be higher for some brands.”

Twitter did not respond to multiple requests for comment.

At a Twitter Spaces event in November, Musk addressed the issue of companies stopping ads, saying he understands advertisers “want to give it a minute.” He added that “the best way to see how things are going (on Twitter) is to just use Twitter.”

Tech-focused publication The Information reported Wednesday that Twitter’s fourth-quarter revenue fell nearly 35% year-over-year due to a decline in advertising, citing details shared by a Twitter advertising executive.

Twitter posted a loss of $270 million in the three months ended June 30, on total revenue of about $1.18 billion. read more

Pathmatics estimates show continued disruption to Twitter’s core revenue stream heading into 2023 as top consumer brands pull back.

Forward orders, or contracts to lock in future ads, also fell for January and February, according to research firm Standard Media Index, which did not provide details.

Twitter is moving to bring back the flow of advertisers. It has introduced a number of initiatives to win back advertisers, offer some free ads, lift a ban on political ads and give companies more control over the placement of their ads.

“Frankly, they’re really amazing incentives. I’ve honestly never seen an advertiser like this,” said Molly Lopez, owner of Miami ad agency HITE Digital.

In addition, Mark DiMassimo, founder of the New York-based advertising agency DiMassimo Goldstein, said “market basement” direct marketers and political action committees – big spenders on Facebook by Meta Platform Inc ( META.O ) – could fill the advertising gap.

Pathmatics found that Coca-Cola Co ( KO.N ) halted spending earlier that month after receiving about $1.1 million in Twitter ads, while HBO’s spending fell to about $38,000 in December from about $1.1 million in November.

Coca-Cola declined to comment. HBO spokesman Chris Willard would not comment on the specifics of the ad spend, but said “we will evaluate the platform under its new leadership and determine appropriate next steps.”

Among consumer brands, Heinz ketchup maker Kraft Heinz Co ( KHC.O ) and Stouffers food maker Nestle SA ( NESN.S ) have stopped all advertising, according to Pathmatics estimates. Heinz and Nestle declined to comment.

Mass retailer Target Corp ( TGT.N ) and department store operator Kohls Corp ( KSS.N ) also skipped advertising on Twitter on Black Friday, one of the biggest shopping days of the year. Kohl’s did not respond to requests for comment.

However, Apple Inc ( AAPL.O ) and PepsiCo Inc ( PEP.O ) have increased spending, according to Pathmatics.

Apple did not respond to requests for comment. PepsiCo declined to comment.

Financial technology provider SmartAsset and Amazon.com Inc ( AMZN.O ) said Pathmatics estimates of growth in advertising were inaccurate. Amazon did not provide further details, and SmartAsset said the numbers were “inflated” without providing details. “We want to reiterate that our numbers are just estimates,” Pathmatics said.

BRAND SAFETY

Musk’s arrival on Twitter led to a decline in advertising that began in September after Reuters reported that promotions were appearing alongside tweets soliciting child pornography.

Estimates show that most companies suspended spending in November, the same month Musk reinstated suspended accounts and released paid account verification, which resulted in fraudsters impersonating corporations.

Telecom company AT&T Inc ( TN ) and pet food provider Mars Inc cut spending in September amid concerns about brand safety.

As the companies pulled back on Twitter, they continued and in some cases increased advertising on Meta Platform Inc’s ( META.O ) Facebook and Instagram and on the short video app TikTok, according to Pathmatics.

Meta and TikTok did not immediately return requests for comment.

Advertising spend of the top 30 Twitter advertisers in the last four months of 2022

AT&T said it stopped advertising in September because of “concerns about the visibility of content” next to its ads. The company is talking to Twitter about its concerns, according to a person familiar with AT&T’s thinking.

Mars said his “suspension remains in effect.”

Twitter told Reuters that it is investing in child safety. read more The platform relies on automation to moderate content and limit search results in areas including abusive hashtags and child abuse. read more

The companies also declined to tweet. As of Jan. 19, Target and Special K cereal maker Kellogg Co ( KN ) had not tweeted since October; Coca-Cola and electronics retailer Best Buy Co Inc ( BBY.N ) stopped tweeting in November, according to a Reuters review of key company news.

Target, Best Buy and Kellogg did not respond to requests for comment.

Reporting by Jessica DiNapoli in New York and Richa Naidu in London; Additional reporting by Sheila Dang in Dallas; Edited by Vanessa O’Connell and Suzanne Goldenberg

Our standards: Thomson Reuters Trust Principles.

Jessica DiNapoli

Thomson Reuters

From paper towels to packaged food, a New York reporter covering US consumer products, the companies that make them, and how they’re responding to the economy. Previously reported on corporate boards and troubled companies.

Richa Naidu

Thomson Reuters

London-based reporter covering retail and consumer goods, analyzing trends including supply chain coverage, advertising strategies, corporate governance, sustainability, policy and regulation. Previously, he wrote about US-based retailers, major financial institutions and covered the Tokyo 2020 Olympic Games.



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