The advertising side of Twitter is apparently in shambles, with daily earnings down 40% year over year. Following Elon Musk’s acquisition of the company in October, more than 500 of the company’s major advertisers reportedly halted spending on the site. In spite of this, Twitter continues to draw in and keep lucrative media partnerships.
Twitter will certainly have a tough time turning a profit this year, despite Musk’s ambitions to diversify the company away from its reliance on advertising. A daily revenue of $8 million (or $320 million for the quarter) is equivalent to 40% of Twitter’s Q1 2022 revenue of $1.2 billion. The company needs to bring in $3 billion in sales this year to cover the $1.5 billion in interest payments required by the debt Musk raised to finance the acquisition.
The advertising issues may force further budget reductions. Musk’s approach to contact moderation, which apparently includes restoring Donald Trump and sacking executives in charge of preventing hate speech, has displeased some major advertisers. Since Musk’s takeover, Twitter has lost around 75% of its staff, and further layoffs are likely inevitable if the company continues to lose money.
Twitter’s success in luring and keeping media outlets as clients are cause for optimism. Axios reports that through the first half of this year, the platform has maintained partnerships with more than three dozen media firms, news publications, and sports leagues, including the NFL, NBA, NHL, MLB, NASCAR, and PGA Tour. Even if they don’t want to admit it publicly, Twitter has become too profitable for them to give up in this unstable economic climate.