The news: In the three months since Elon Musk took over as head of Twitter, more than 500 of its top advertisers have stopped spending on the platform, senior managers told employees last week, according to The Information.
In the same meeting, senior employees revealed that fourth-quarter revenues had fallen 35%, far below internal expectations, and that the company hopes to hit $732 million in revenues during the current Q1—amounting to a 39% decrease from last year.
Who’s to blame? To pinpoint the cause of Twitter’s rapid decline, there’s really only one direction to look: up. Musk’s takeover has been rife with drama, and his reign so far has been marked by high-profile errors.
- One of the first major incidents was the update to paid subscription service Twitter Blue, which allowed any user to receive a verification check for a small fee. The policy quickly led to a deluge of fake accounts impersonating brands and high-profile individuals. Twitter Blue has been underperforming compared with other social subscriptions like Snapchat+.
- Misinformation and hate speech have populated the platform since Musk’s purchase, and he has reinstated the accounts of controversial figures like Andrew Tate. In response, users left Twitter for smaller communities on platforms like Discord or sites with tougher moderation policies like Mastodon, and many advertisers jumped ship.
- Infamously, Musk also dramatically culled Twitter’s staff. Almost half of Twitter workers were laid off less than a month into his tenure, and further layoffs have followed, gutting employees behind Twitter’s core functions and advertising business.
As a result, we adjusted our 2022 US Twitter advertising revenue forecast in November down to $4.67 billion, a cut of $1 billion from our March forecast.