Elon Musk recently said Twitter’s advertising business was on the upswing. “Almost all advertisers have come back,” he asserted, adding that the social media company could soon become profitable.
But Twitter’s U.S. advertising revenue for the five weeks from April 1 to the first week of May was $88 million, down 59% from a year earlier, according to an internal presentation obtained by the New York Times. Twitter has regularly fallen short of its U.S. weekly sales projections, sometimes by as much as 30%, the document said.
That performance is unlikely to improve anytime soon, according to the documents and seven current and former Twitter employees.
Twitter’s ad sales staff is concerned that advertisers may be spooked by an increase in hate speech and pornography on the social network, as well as more ads featuring online gambling and marijuana products, the people said. The company has forecast that its U.S. ad revenue this month will be down at least 56% each week compared with a year ago, according to one internal document.
These issues have been inherited by Linda Yaccarino, an NBCUniversal executive whom Musk named Twitter’s CEO last month. She started her new job Monday.
On a Twitter Space audio event Monday, Musk said advertisers in Europe and North America have put “extreme pressure” on the company, leading “half our advertising” to disappear. “They are trying to drive Twitter bankrupt,” he said.
He did not respond to a request for comment, and Yaccarino, through a spokesperson, declined to comment.
The state of Twitter’s advertising is crucial because ads have long made up 90% of the company’s revenue. After Musk bought Twitter for $44 billion in October and took the company private, he vowed to build “the most respected ad platform.” But he quickly alienated advertisers by firing key sales executives, spreading a conspiracy theory on the site and welcoming back barred Twitter users.
In response, several large ad agencies and brands, including General Motors and Volkswagen, paused their ad spending on Twitter. Musk has said Twitter was on track to post $3 billion in revenue in 2023, down from $5.1 billion in 2021, when it was a public company.
Twitter’s valuation has since plunged. In March, Musk said the company was worth $20 billion, down more than 50% from the $44 billion he paid for it. Last week, the mutual funds giant Fidelity, which owns shares in Twitter, valued the company at $15 billion.
Twitter feels increasingly “unpredictable and chaotic,” said Jason Kint, CEO of Digital Content Next, an association for premium publishers. “Advertisers want to run in an environment where they are comfortable and can send a signal about their brand,” he added.
Some of Twitter’s biggest advertisers – including Apple, Amazon and Disney – have been spending less on the platform than last year, three former and current Twitter employees said. Large specialized “banner” ads on Twitter’s trends page, which can cost $500,000 for 24 hours and are almost always bought by large brands to promote events, shows or movies, are often going unfilled, they said.
Twitter has also run into public relations snafus with big advertisers such as Disney. In April, Twitter mistakenly gave a gold check mark – a badge meant to signify a paying advertiser – to the @DisneyJuniorUK account, which Disney doesn’t own. The account posted racial slurs, leading Disney officials to demand from Twitter an explanation and assurances that it wouldn’t happen again, two people with knowledge of the situation said.
Disney, Apple and Amazon declined to comment.
Six ad agency executives who have worked with Twitter said their clients continued to limit spending on the platform. They cited confusion over Musk’s changes to the service, inconsistent support from Twitter, and concerns about the persistent presence of misleading and toxic content on the platform.
Last month, for instance, a picture that appeared to show an explosion near the Pentagon – which artificial intelligence experts identified as a synthetically generated image – was shared by dozens of Twitter accounts and briefly caused the stock market to tumble.
Some advertisers also continue to worry about Musk’s tweets. Last month, he posted several times comparing billionaire financier George Soros, a frequent target for conspiracy theorists, to “X-Men” comic book villain Magneto. Ted Deutch, CEO of the American Jewish Committee, noted that Soros and Magneto are Holocaust survivors and that “the lie Jews want to destroy civilization has led to the persecution of Jewish people for centuries.”
“Musk should know better,” he said.
Twitter is exploring ways to make it easier for advertisers to buy space on the platform, testing an automated system outside the United States to make deals, two people familiar with the arrangement said. Insider earlier reported the move.
The company is experiencing ad growth in areas that it once shied away from or prohibited, including online gambling and marijuana products. In one week last month, four of Twitter’s top 10 U.S. advertisers were online gambling and fantasy sports betting companies, according to one presentation. Twitter has also started allowing ads for cannabis accessories, including “bongs, vapes, rolling paper,” as well as erectile dysfunction products and services, according to internal emails.
Adult content, which is permitted on Twitter, has become a concern among the company’s sales staff. When some employees tried to drum up interest from advertisers for Mother’s Day, they found that potential sponsored search terms, including “MomLife,” surfaced pornographic videos, according to two people familiar with the conversations.
These are issues that some advertisers hope Yaccarino will solve.
Dave Campanelli, chief investment officer of Horizon Media, said he was hoping for change after Yaccarino started, because media agencies such as his struggled to maintain contact with Twitter last fall after Musk arrived.
“For a period, we weren’t even sure who to get on the phone with to talk to,” he said. “With Linda coming in, that could change that in a big way.”
He acknowledged that Twitter’s mercurial boss and volatile environment might pose a challenge for Yaccarino.
“It’s a tall order,” Campanelli said.
This article originally appeared in The New York Times.