Can Twitter turn the tide this year?

When Elon Musk first (and finally) completed his purchase of Twitter at the end of October 2022, every subsequent and frequent policy change he made at the “global public square” made top headlines, with newsrooms, advertisers, industry watchers and all other stakeholders striving to keep pace with his mercurial decision-making.

Now, as changes continue to take place into 2023, the headlines have become smaller and tucked away, the industry’s attention less transfixed, and advertisers have continued their exodus, a reflection of the receding relevance of Twitter as an ad platform.

Late last week, Musk announced that Twitter would be sharing revenue for ads appearing in reply threads. The benefit, however, will be for creators who are Twitter Blue subscribers.

As previously reported by exchange4media, while Twitter is relatively low on user numbers (coming in 16^th place in terms of MAU in a list dominated by Meta and Alphabet, who have billions of monthly users and potential customers), it did have a high impact, given the large presence of politicians, technocrats, journalists, and other newsmakers on the platform, making it a small, but a valuable, part of advertisers’ media buys.

However, according to Reuters, “Advertising spend on Twitter Inc dropped by 71% in December, data from an advertising research firm showed, as top advertisers slashed their spending on the social media platform after Elon Musk's takeover.”

The timing of that report by Standard Media Index (SMI) probably isn't the best for Twitter, which is reeling from an exodus of advertisers, the main source of its income at over 90%. Apart from pivoting heavily towards paid user accounts, to be available at a level of tiers, ranging from getting to the previously coveted blue tick to having an ad-free experience, Musk and Twitter have introduced a host of measures to win back advertisers, from offering limited free ads, to allowing political advertising and giving companies greater control over the positioning of their ads.

Megha Ahuja, VP- Digital Media Planning, Carat India, says that advertisers pulled back owing to the internal chaos and instability that soon followed Musk's takeover. “Keeping in mind the actions taken by the platform, brands decided to not put their reputation at stake by getting their ads showcased alongside harmful content.”

“After the Twitter Blue tick backfired, it got relaunched with modifications to claw back revenues that were going down by the day with the advertisers leaving. All the new changes are being seen in the same light as the rules and policies are being made on the go. These are based on reactions rather than the development of a robust platform,” she says.

As per the SMI report, ad spending on Twitter in November fell by 55 per cent as compared to last year. This is despite autumn and winter being traditionally a time of higher ad spends since advertisers put their brands front and centre during the holiday season.

Indeed, according to research firm Pathmatic, most of these advertisers had stopped their spending in November, the same month that Musk restored suspended accounts and released a paid account verification, which naturally resulted in parody accounts and more dubious entities impersonating major brands and corporations.

Alin Choubey, Business Head- North, FoxyMoron (Zoo Media), believes that due to a lack of clarity in vision and disruptive actions, advertisers are losing faith in the platform by the day. “Twitter lost more than two-thirds of its ad revenue in December as major advertisers shied away from it. There is still a small chance for Twitter if systematic changes come to the platform rather than it being used as a personal marketing tool for one individual.”

Earlier in January of this year, The Information reported that a senior manager at Twitter said that its daily revenue earnings were down 40 per cent as compared to the same day in 2022, even as 500 of the top advertisers on Twitter had paused spending since Musk's ascension.

Choubey believes that a new leader, better-thought-out advertising services, and stability in decision-making could take Twitter a long way from where it is right now.

And Twitter is making more moves aiming in that direction. The platform is now introducing a new ad tool called Search Keywords Ads, which empowers advertisers to have their tweets appear in the search results for certain keywords (at a price of course). This is just one of the moves aimed at resuscitating the funds flow the company needs as well as restoring some of its trust deficit.

While it is undeniable that in the last few months Twitter has been witnessing a downfall in terms of ad spends instead of stabilizing after the initial turmoil during the takeover, Siddharth Devnani, Co-Founder & Director, SoCheers, thinks the platform’s endeavour to monetise users over advertisers could work in their favour and might give them some cushion in the short term if it works out.

“From an advertiser’s point of view; advertisers who haven’t spent on Twitter ads till now will not be seen considering it anytime soon, especially amidst all the turmoil. The ones who have been seen spending so should be a point of focus for Musk and team,” says Devnani, while noting that given the pessimism in the business environment, especially in the tech communities, a quick revival story (through ad spends) for the platform seems a bit tough.

Ahuja further says that it is important to understand that public sentiment is currently against the platform. “This might not help the advertisers who are still on the platform as they may not be seen in a good light. 2023 is a year for Twitter to get its act together and stabilise mainly for the users as the brands will then follow,” elaborates Ahuja, while observing, “Additionally, we can also see that not just advertisers but brands publishing content on the platform too have considerably reduced. And in India where TikTok is not available, Meta stands to gain more from these developments.”

What 2023 and the future hold for Twitter hang in the air, in this case, the web.