Barely weeks into her role as Twitter CEO, former NBCUniversal executive Linda Yaccarino has a tough task at hand bringing back advertisers on the social media platform and has asked employees to be ready for “hand-to-hand” combat.
For the background, there was an exodus of advertisers on Twitter after Tesla CEO Elon Musk acquired Twitter in October 2022 by paying $44 billion.
Multiple advertisers quit the platform after Musk acquired Twitter – albeit due to different motivations.
For instance, automakers like General Motors, Volkswagen, and Fisker compete with Tesla to grab a share of the fast-growing electric vehicle market and might have had apprehensions about the brand being advertised on the Musk-owned platform.
Many advertisers were concerned about Musk’s growing tilt towards conservatives including his restoration of several banned accounts – including that of former US President Donald Trump.
Multiple reports suggest a rise in hate speech on Twitter. Musk however counters the argument and in a BBC interview earlier this month he said that hate speech hasn’t increased on the platform since his acquisition.
Musk’s Subscription Pivot Wasn’t Successful
While Musk claimed to have performed a successful “open heart surgery” on Twitter, the platform has been marred in controversies and technical glitches ever since his acquisition.
Furthermore, Musk tried pivoting Twitter from an ad-supported company to a subscription-led business. The pivot was far from successful which was evident when Musk hired advertisement industry executive Yaccarino to lead Twitter.
The billionaire also alluded to the failed pivot by calling advertisement “great” and adding that Tesla – which does not advertise its cars – would also consider doing so.
Only a handful of Twitter users opted for the paid subscription and almost half of the early adopters did not renew in the next month. According to Mashable, Twitter had only 640,000 paid subscribers in April while the platform has over 350 million users.
According to Social Media Today estimates, Twitter Blue Subscription is running at a quarterly revenue run rate of just $21 million – a fraction of the company’s overall revenues.
Musk eventually restored the blue ticks for celebrities as most did not opt for the paid subscription.
Twitter Ad Revenues Have Crashed
Meanwhile, Twitter’s advertisement revenues have cratered since Musk’s acquisition and according to a New York Times report, the company’s revenues fell 59% YoY in April.
By Musk’s own admission, Twitter is on track to hit $3 billion in revenues this year – which is 41% lower than the $5.1 billion revenues that it hit in 2021, the last full year before he took it private.
To put that in perspective, Meta Platforms’ revenues fell around 2% last year but the company reported a 3% rise in Q1 2023 revenues.
Twitter’s popularity among advertisers pales in front of Meta. According to the report that’s titled “Digital 2023 April Global Statshot,” 21.5% of working professionals aged between 16 to 64 said that their company uses Facebook for social media marketing.
In contrast, 10.9% of users said that their company uses Twitter for social media marketing.
To make things worse for ad-revenue-dependent companies like Meta and Twitter, global ad spending has been quite tepid.
Media investment group GroupM predicts that global ad spending would rise 5.9% in 2023 while digital ad spending would rise 8.4%. The overall ad revenue growth trails the 7% projected inflation for 2023.
Linda Yaccarino Wants Twitter Employees to be Combat Ready
To sum it up, the global digital advertising industry is battling a slowdown amid the deteriorating global economy. To make things worse for Twitter, many advertisers don’t want to advertise on the platform.
— Paul Mosenson (@NuSparkMktg) June 24, 2023
Yaccarino had her task cut out when she took over as Twitter’s CEO which is to boost the company’s sagging revenues.
According to a Financial Times report, Yaccarino told Twitter’s sales team to get ready for “hand-to-hand combat” – which means meeting big brands in person to persuade them to advertise on Twitter.
Here it is worth noting that Twitter’s workforce is down by almost 80% since Musk took over. The layoffs impacted all the sections – including the sales team.
Yaccarino herself plans to meet talent agencies, celebrities, and political leaders to convince them to return to the social media platform.
She reportedly wants to launch full-screen ads with sound on Twitter to make the platform more appealing to advertisers. The platform’s advertising reach has meanwhile fallen over the last six months and according to Datareportal, its reach was 373 million in April, down from 556 million in January.
Can Yaccarino Turnaround Twitter’s Advertising Business?
The opinion is divided over whether Yaccarino can turn around Twitter as Musk is still seen as being actively involved in the company – even as he has transitioned to the role of the CTO.
Lou Paskalis, an advertising veteran and chief executive of AJL Advisory is among those who are backing Yaccarino to turn around Twitter’s advertisement business and said, “I do believe that they’re going to have superior ad product instantly.”
Twitter's new boss: Who is Linda Yaccarino?
Twitter CEO Linda Yaccarino is also known as the 'velvet hammer' in ad world
— Pete (@psPetePatel7) May 13, 2023
To be sure, Yaccarino is an ad industry veteran and has earned the nickname “the velvet hammer” for her deal-making ability – and also has good relations with the advertisers.
However, not all are convinced that it is that easy to turn around the social media company.
According to the Financial Times, the chief executive of an advertising group said “Either [Twitter and Yaccarino] turn this around and make a U-turn on the revenue trend and advertising within the next six to 12 months,” while adding “[But] if that does not happen until mid to end 2024, I think this is going to be a very dangerous and slippery path downwards.”
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