CEM REPORT, ICT | Twitter still has a negative cash flow as a result of a drop in advertising revenue Elon Musk has disclosed.
Twitter has experienced a 50 per cent drop in advertising revenue since Musk took over, he added that a “heavy debt load,” has kept the platform’s finance in the negative.
Many advertisers left the Twitter ad accounts over concerns about content moderation, mass layoffs and general uncertainty about Twitter’s future.
“It’s definitely been extremely difficult,” Musk said in Twitter Spaces livestream event Musk hosted with Robert F. Kennedy, Jr last month. “Basically, our revenue is cut in half because we didn’t toe the line.” He added it’s been a “huge struggle for Twitter to break even,” CNN Business reports.
Although in April, Musk told the BBC the platform is now “roughly breaking even” and that most of its advertisers have returned.
The New York Times reported that Twitter’s US advertising revenue from the five weeks from April 1 to the first week of May was down 59 per cent year-over-year.
Another report by CNN states that only 43 per cent of Twitter’s top 1,000 advertisers as of September before Musk’s takeover, were still advertising on the platform as of April 2023.
Musk in a move to ramp up revenue introduced a variety of revenue-generating tactics on the site, ranging from providing blue checkmarks with a Twitter Blue membership to putting Tweetdeck behind a paywall.
He also hired former NBCUniversal marketing executive, Linda Yaccarino, as CEO.
More pressure has been mounted on Twitter with Meta’s rival app Threads, which surpassed 100 million downloads less than a week after it launched.
Recall that CEM reported that Twitter announced content creators would be able to get a share of the site’s ad revenue. A move which is expected to encourage more creators to join the site.
