Elon Musk sells advertising to find revenue

Since the end of October 2022 and the acquisition of Elon Musk, Twitter has struggled to find revenue. Many large advertisers quickly fled the platform in the face of risks associated with the social network’s new moderation policy. Moreover, these fears were partially realized when Twitter reinstated tens of thousands of accounts that had been banned for disinformation or inciting hatred. Worse, while Elon Musk has pledged himself to provide guarantees to wary advertisers, his political positions have only made the situation worse.

At the same time, the businessman’s grand plan to rework the economic model of the social network to rely less on advertising – which represents almost 90% of the group’s turnover for the year 2021. is still not taking shape. Result: while waiting for a major recovery, the company tries to save furniture with short-term offers.

Promotion: two for the price of one!

According to app analytics firm Sensor Tower, 75 of Twitter’s 100 largest advertisers before Elon Musk took over spent nothing on the platform in the first week of 2023. as at the end of December. Among the figures of this exodus are the car manufacturers General Motors and Volkswagen, the airline company United Airlines or the pharmaceutical company Pfizer.

To compensate for these departures, Twitter offers discounts. According to wall street journal, the company launched a big promotion in mid-December: if advertisers spend between 250,000 and 500,000 dollars on the advertising space of the social network, the latter offers twice as much! The only restriction in the agreement, the envelope must be spent before February 28, and this is not coincidental. On February 13, the Superbowl will take place, the final of the American football championship (NFL) whose half-time show has become a cultural event in its own right. Followed by more than 99 million viewers in the United States alone, it is a must in the world of advertising, where Twitter achieved its biggest revenue in 2022. Better than Black Friday!

In addition to the action’s impact on costs, the offer aims to introduce brands to Twitter’s new advertising tools. Advertisers taking advantage of the promotion, for example, have to use a filter intended to control the content around the advertisement. They will be able to provide a list containing up to 1,000 keywords, which the social network promises not to display above or below their advertising. It is difficult to estimate whether these new precautions will be enough: some studies indicate that the number and frequency of hateful content has increased significantly on Twitter since Elon Musk took office. And, at the same time, the social network will consider removing its blocking of political advertisements, even if Musk asserts himself as a conservative who votes for Republicans.

Auction

The new owner of Twitter has been saying for months that, thanks to cost-cutting, the company should break even in 2023. But on the other hand, he continues to wave to his employees about the risk of bankruptcy, a technique used He also in his other businesses to create a sense of urgency. Since coming to power, the businessman has laid off 80% of the workforce, down to 2,000 employees from 8,000, and he’s not done yet. The company again laid off dozens of workers earlier this year.

But without advertisers, Twitter will quickly have a revenue problem, and while Elon Musk has hinted that he wants to rely less on them, he hasn’t been clear about his intentions regarding Twitter’s advertising space. Half-heartedly, he hinted at the project to turn the social network into a “super-app” like the Chinese WeChat. This shift involved the arrival of a payment system, where the company started the process. But the launch of the new version of the Twitter Blue subscription, which should serve as the foundation of the new model, has completely failed, in addition to sparking a confrontation with Apple over the commission charged by the App Store. As a result, the social network increased the price of the subscription, from 8 euros when purchased on the web version of the site, to 11 euros when purchased from the app on the iPhone. Effective at the beginning of the year, this price increase has upset some of Twitter Blue’s few followers.

Since structural changes are not lasting or delayed, the company is trying to make a splash. Elon Musk has suggested that Twitter could auction off about 1.5 billion usernames (that look like @elonmusk, for example) used by long-dormant accounts. Short names with two or three letters, or those with one number, are considered very rare products. They also regularly attract hackers, who manage to sell them at exorbitant prices on the black market. Ironically, the company also auctioned, between January 17 and 18, 631 items taken outside its offices. Among the purchases are bright neon with an effigy of the group’s logo, a pizza oven or computer equipment.

Musk continues to rock Twitter

To replace Twitter, Musk continued to shake its foundations. From the beginning of 2023, the site will no longer allow tweets to be displayed in chronological order, and soon it must allow messages of more than 4,000 characters, compared to only 280 now. This will be a big change for the social network whose brevity of messages is the differentiating element. In addition, Twitter is already testing a virtual currency, the Cornerwhere new mechanisms for paying creators will be rolled out as well as existing ones (subscriptions, donations, etc.).

At the same time, since Saturday Twitter has cut off access to its API, the interface that allows third parties to access certain data such as the publication of tweets or trends. As a result, many services intended to improve and facilitate the use of the social network no longer work. Since the company is not talking about the topic for the moment, some have speculated that it is a technical problem. But according to The informationthe reduction will be voluntary.

According to New York Times, Musk again signaled to his teams that he must validate any changes himself. However, he announced – following a quick poll on his Twitter account – that he is leaving his position as CEO of the company, and that he is taking better care of one of his other companies. , Tesla, under pressure from shareholders. ” We will struggle until we are as close to the perfect product as possible. “, he wrote to the employees of the social network.