Twitter continues to miss its advertising targets as the misery mounts

The World Cup has traditionally been a boon for Twitter, with record traffic and an influx of advertising dollars.

But this time, as the global soccer tournament began on Nov. 20, Twitter’s ad revenue in the US was 80 percent below internal expectations for the week, three figures knowledgeable said.

At the same time, Twitter quickly lowered its revenue forecasts. The company previously forecast it would generate $1.4 billion in the last three months of the year, up from $1.6 billion a year ago due to the global economic downturn. But as Twitter continued to miss its weekly advertising targets, that number dropped to $1.3 billion and then to $1.1 billion, two people said.

Elon Musk, the new owner of Twitter, has repeatedly warned that his social media company is in financial trouble. Interviews with seven former employees and internal documents viewed by The New York Times paint a more complete picture of Twitter’s financial problems.

Many of the company’s problems can be traced back to the acquisition of Mr. Musk at the end of October. Since then, advertisers, who provide 90 percent of Twitter’s revenue, have halted some spending on the platform amid concerns about how Mr. Musk could change the service. The billionaire, a self-proclaimed “absolute freedom of expression”, has reinstated banned accounts and scrapped at least one disinformation policy. Hate speech on Twitter has skyrocketed in recent weeks, researchers found.

At the same time, Mr. Musk alternated between chasing advertisers and destroying them. Last month he threatened with a “thermonuclear name and infamyfrom brands that have stopped spending on Twitter. This week, he briefly argued with Apple, which was on track to spend more than $180 million on Twitter ads this year, three people said.

Twitter’s advertising business has become so busy that it has started offering brands additional incentives. Some brands only commit to promotions for events, such as the Super Bowl, with heavy discounts or clauses that allow them to back out for any reason, according to internal documents and three people familiar with the effort. Automakers are among the most concerned advertisers, with General Motors questioning whether Twitter’s data would be shared with Musk’s car company, Tesla, three people said.

“There has been zero confidence in Twitter from us, especially with the whiplash we’ve been experiencing for the past four weeks,” said Ellie Bamford, the head of global media at R/GA, a creative agency. Last month, IPG, the parent company of R/GA and one of the world’s largest advertising companies, advised its clients to pause their ads on Twitter.

Mr Musk did not respond to a request for comment.

Even before he finalized his deal for Twitter, advertisers began expressing doubts. Twitter had 3,980 advertisers in May, the month after Musk agreed to acquire the company, according to MediaRadar, an advertising intelligence firm. In October it had 2,315 advertisers, the fewest of all months so far.

Advertisers’ confidence in Twitter was further damaged when the sales and advertising team transitioned after Musk took charge. Leslie Berland and JP Maheu, who were responsible for maintaining important relationships with some of the top brands, left last month. Robin Wheeler, a US advertising executive who resigned briefly before staying on, was subsequently fired after Mr Musk asked her to cut employees from the sales team and she refused, two people said.

Dara Nasr, who oversaw Twitter’s European advertising business, also left last month. The company’s ad sales in Europe, the Middle East and Africa were down more than 50 percent in the week of Nov. 21 from the week before, two people familiar with the numbers said. The Platformer Newsletter previously reported Twitter’s numbers for the region.

Mr Musk also made good on his threat to call out advertisers who had paused their spending. On Monday, he posted several barbed tweets about Apple and its CEO, Tim Cook, noting that the iPhone maker had withdrawn its ads on Twitter. Apple, which does not advertise on Instagram or Facebook, had spent more than $150 million on Twitter ads by 2022 and surpassed that with more than $180 million in ad spend, three people said.

But Apple temporarily put that on hold after a shooting that killed five people at a Colorado Springs LGBTQ nightclub on Nov. 19, two people said. Big brands tend to roll back ads when there are shootings or disasters so their promotions don’t appear alongside news or tweets about the tragedies.

Mr. Musk suggested that Apple’s reduced advertising would lead to censorship on Twitter. “Apple has largely stopped advertising on Twitter,” he tweeted. “Do they hate free speech in America?”

On Wednesday, Mr. Cook and mr. Musk meeting at Apple’s headquarters in Silicon Valley. Mr Musk later tweeted that they cleared up a “misunderstanding”. Apple did not respond to requests for comment.

Ms Bamford said Mr Musk’s behavior was outrageous. “There is no way to shame someone for advertising in an environment that is controversial and dangerous,” she said. “Yelling at people is not a plan.”

Other advertisers are concerned that their Twitter advertising data could be shared with Mr. Musk’s other companies. GM, the first brand to announce it had paused its Twitter ads in late October, was seeking assurances that its data would not be shared with Tesla, two people said. It also asked for a way to keep its information separate from systems that Tesla’s engineers could access, they said, given that Mr. Musk had taken Tesla employees to Twitter to navigate the ownership change.

“It is important to us to ensure that our advertising strategies and data can be securely managed by a competitor-owned platform,” a GM spokesperson said in a statement.

Twitter has recently offered additional incentives to some brands to place ads on the service, according to an ad agency that received a proposal from the company. The greater the amount spent on the platform, the more Twitter will amplify those ads, according to the proposal, which was reviewed by The Times.

Morning Brew, a business newsletter site, previously reported on the incentives.

Twitter’s ad sales teams are now trying to confirm commitments for the Super Bowl in February. PepsiCo, whose ad agency has recommended that customers pause ads on the platform, was looking to opt out of ads at any time, said a person familiar with the negotiations. Pepsi did not respond to a request for comment.