Twitter’s new CEO, Linda Yaccarino, started work earlier than expected on Monday, and while she tweeted her excitement on Tuesday, the surprise she got upon discovering April’s advertising revenues may not please her. The New York Times reported a 59% decrease in ad revenues compared to the previous year. Despite public claims from company boss Elon Musk, who claimed that all advertisers wanted to come back, no immediate improvement is expected.
Yaccarino boasts extensive experience in the advertising industry; before joining Twitter, she spent 11 years at NBCUniversal, where she was responsible for the media company’s global advertising business. She is considered well-connected and respected among advertising decision-makers, an advantage that will play an essential role in winning back the trust lost among the advertising industry.
While Musk publicly claims to stand for “freedom of speech,” advertisers are reluctant to place their ads near hate speech and disinformation. Compared to Musk’s assertions, Twitter’s implementation of content bans before the Turkish presidential election and the banning of unpopular journalists seem to contradict such claims. Advertising revenue was Twitter’s primary source of income, accounting for up to 90% of the total income. However, many customers stopped booking ads shortly after Elon Musk took over, and the company has experienced a back-and-forth on the verification hooks on the platform, resulting in chaos with false accounts pretending to be corporations.
According to experts, advertisers only want to place their messages in predictable environments, a factor that hasn’t been possible on Twitter, causing advertisers to lose confidence in the platform. In addition, Musk’s own tweets are a deterrent, with his recent claims about US investor George Soros criticized as anti-Semitic.
Last week, it was publicized that the total value of Twitter had fallen to a third of the purchase price. Fidelity’s figures put the company’s worth at less than $15 billion, while Musk initially paid $44 billion. To reach the social network’s profit zone as fast as possible, Musk has made thousands of employees redundant and implemented some rigorous austerity measures, such as not paying due bills or the rent for office space.
It remains to be seen how things will develop under new CEO Yaccarino, though her extensive advertising industry experience and connections may enable her to win back advertisers’ confidence.
