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.
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.
The broader ad market: While Musk’s leadership has led the company into chaotic waters, Twitter was far from perfect before his takeover.
Our take: Shrinking ad budgets and a broad shift from social media advertising means Twitter will not only have to fix its recent missteps to repair advertiser relationships, but will need to innovate and distinguish itself from competitors.
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