Record 26% of Advertisers Plan to Cut Spending on Twitter, Threatening Revenue Plunge

Advertisers have been fleeing X (formerly known as Twitter) since Elon Musk took over in October 2022. Under Musk's leadership, the platform has witnessed a surge in hate speech, misinformation, and racist rhetoric. This mass exodus of advertisers has led to dire consequences for the platform, as a new study from the data firm Kantar reveals that a record 26 percent of advertisers are planning to cut spending on Twitter next year. This withdrawal could be catastrophic for a site already grappling with declining revenues.

'Brand Safety' Concerns Drive Advertisers Away

The concerns surrounding the platform's brand safety have prompted advertisers to seek more stable and reliable options. Kantar's report, based on interviews with 1,000 senior marketers and 18,000 consumers worldwide, indicates that only 4 percent of marketers believe that Twitter ads provide brand safety. In contrast, Google enjoys a considerably higher level of trust at 39 percent. This lack of confidence in Twitter's advertising environment has deterred marketers, leading to a significant decline in favorability towards Twitter ads, with 21 percent of marketers expressing their disapproval.

As a result, advertisers have been shifting their marketing spend away from Twitter for several years now. The rapid acceleration of this trend in the past 12 months suggests that a turnaround for Twitter's advertising prospects is unlikely. While consumer preference for ads on the platform has actually increased, the dwindling user base and the prevalence of bots on Twitter offset any potential benefits.

Musk's Controversial Interventions and Revenue Decline

Despite Musk's attempts to address the advertising concerns, his interventions have only exacerbated the situation. During an onstage tirade in November 2023, he infamously told advertisers to "Go fuck yourself." This ill-conceived remark has had severe repercussions, resulting in a staggering 53 percent decline in revenue in the second quarter compared to the same period last year. In a desperate bid to rectify the damage, Musk later pleaded with advertisers to return, but his subsequent decision to sue them for not purchasing ads and declaring "war" has only deepened the mistrust in Twitter's stability as an advertising platform.

Twitter's Response and Current State

In response to the declining advertising revenue, a Twitter spokesperson stated that advertisers are experiencing all-time-high levels of usage and that the platform now offers stronger brand safety, performance, and analytics capabilities. The spokesperson further asserted that the platform's brand safety rate is validated by DoubleVerify and Integral Ads Science, with an average rate of 99 percent. Despite these claims, the Kantar data indicates a stark decline in advertiser investment, contradicting the spokesperson's assertions.