Twitter sees ‘massive drop in revenue’ after advertisers halt investments

Elon Musk said Friday that Twitter saw a “massive drop in revenue” as an increasing number of advertisers stopped spending on the platform following its $44 billion acquisition.

“Twitter has seen a massive drop in revenue, due to activist groups putting pressure on advertisers, although nothing has changed with content moderation and we have done everything we can to appease activists,” he said in a tweet.

“Extremely confused! They are trying to destroy free speech in America.”

The remarks came after General Mills and the Volkswagen Group confirmed they are pausing Twitter advertising following Musk’s takeover of the social media company, in the clearest sign yet of increasing uncertainty from advertisers about the platform’s future under new ownership.

“We have paused advertising on Twitter,” Kelsey Roemhildt, a spokeswoman for General Mills, told CNN in a statement, becoming the first company not to compete with Musk’s Tesla to confirm such a move.

“As always, we will continue to monitor this new direction and assess our marketing spend,” the spokesperson said.

In a separate statement, Volkswagen Group, which owns Audi, Porsche and Bentley, confirmed that it had recommended that its brands “pause their paid activities on the platform until further notice”.

The Wall Street Journal, which was the first to report the moves, also said Pfizer and Mondalez are pausing Twitter ads. The companies did not immediately respond to a request for comment.

The companies join General Motors, which had previously said it would stop paying for advertising on Twitter as it weighs the platform’s “new direction.” Toyota, another Tesla competitor, previously told CNN it is “in discussions with key stakeholders and monitoring the situation” on Twitter.

Ad-buying giant Interpublic Group, which works with consumer brands like Unilever and Coca Cola, earlier this week also recommended that its customers pause advertising on the platform.

The impact is apparently already being felt on Twitter, as Musk tweeted that “Twitter has seen a massive drop in revenue due to activist groups pushing advertisers” on Thursday (3), after many of the commercials were made.

After months of uncertainty over Musk’s pending acquisition, advertisers are now facing questions about how Musk will change the platform, which is already a contender in the digital ad space despite its massive political clout.

Musk, known as an innovative entrepreneur and erratic figure, has vowed to rethink Twitter’s content moderation policies and undo permanent bans on controversial figures, including former President Donald Trump.

This creates a challenge for brands who are sensitive to the types of content their ads run on, an issue made more complicated by social media.

Most marketers are irritated by the idea of ​​having their ads displayed alongside toxic content such as hate speech, pornography, or misinformation.

The pauses also come days before the US midterm elections, as many civil society leaders fear misinformation and other harmful content could spread on the platform and create disruptions.

Musk said he is not a fan of advertising and is currently working to increase Twitter subscription revenue to increase his bottom line and be less reliant on ad sales, which represent 90% of Twitter’s overall revenue.

But this change will not happen overnight, if at all. Musk said he plans to roll out an $8-per-month subscription plan that will provide users with a checkmark, in addition to a number of other perks, but the plans have faced strong backlash.

In the meantime, Musk is working to prevent a possible exodus of advertisers.

Musk’s team spent Monday “meeting with the marketing and advertising community” in New York, according to Jason Calacanis, a member of Musk’s inner circle.

Musk also met earlier this week with a group of leaders from civil society organizations including the Anti-Defamation League, the Free Press and the NAACP to address concerns about the rise of hate on the platform.

Representatives who attended the meeting told the CNN who were encouraged by Musk’s willingness to speak out and his initial commitments not to change the company’s content policies before the midterm elections, but urged him to take further steps to protect the platform.

Just before news broke last week that his $44 billion acquisition of Twitter was complete, Musk wrote an open letter trying to reassure advertisers that he doesn’t want the social network to become a “free-for-all hellscape.” ”.

“Fundamentally, Twitter aspires to be the world’s most respected advertising platform that strengthens your brand and grows your business,” he wrote. “Let’s build something extraordinary together.”

– CNN’s Jon Passantino and Peter Valdes-Dapena contributed to this report.