Can Twitter Restore Lost Revenue?

The Wall Street Journal last week reported that Twitter’s earnings and revenue have declined since Elon Musk bought the company. Insiders quoted by The Wall Street Journal claim that Twitter’s adjusted earnings fell 40% year over year following an exodus of advertisers when Musk made it private.

However, this was not unexpected.

Anyone who was surprised by the fact that Twitter did not make earnings estimates is probably not paying enough attention. Twitter’s reputation has fallen over time in favour of more interactive platforms like TikTok or Clubhouse. This is why young users have been using social media most.

Bailey suggested even that Twitter was more staid and stoic than TikTok or the like.

Twitter’s glory days as a platform for mover and shakers, and the Arab Spring might be behind us now. The platform isn’t irrelevant, but its best days could be in the rear-view mirror – at least as far as high-profile advertisers may be concerned.

Bailey stated that “It was high-jacked” by politicians and talk heads to serve as a soapbox for them to speech ideologic folderols and vitriol. It is the preferred spout for both the well-mannered and the well intentioned. News outlets from all walks of the news media have become too comfortable with the sound bites that it offers.

The Loss of Advertisers

The reason for exodus is simple: “Musk” and this is clearly affecting Twitter’s bottom line.

Carolyn A. Massiah (associate chair of the Department of Marketing) explained that more than half of top 1000 advertisers of September 2022 decided to stop spending on the platform in the first week of January 2023. She is also a lecturer for Marketing at UCF College of Business.

Massiah added, “These include Coca-Cola and Jeep, Unilever and Wells Fargo.” Advertising dollars, much like Facebook and Google, are the main source of revenue for Twitter. Twitter’s revenue began to decline when those revenue dollars were lost.

The question is now, what Twitter should do or could Twitter to recover this revenue?

Massiah stated that all social media platforms want to make money from their platform in order to increase their revenues and diversify them away from advertising dollars. Meta Platforms will introduce Meta verified. Snap Inc. launched a paid tier on June 20, 2022. Twitter Blue is the attempt by Twitter to do this.

A more quiet company leader may prove to be a better choice. This could help to slow down the loss of existing advertisers, and maybe even convince those who have already left to consider returning.

Massiah observed that customers are less likely to form relationships with product brands than they are with their products. Some brands/companies might have wisely decided to break off all ties with Twitter.

She noted that brands have left Twitter because they felt it was in their best interest. They want to retain the customers they have in this fragile economy, and not be judged or criticized by companies they are keeping up with and agreeing to by staying on Twitter.”

New Revenue Streams

While it’s unclear if Twitter Blue might provide additional streams of revenue to offset the loss from the departure of advertisers,

Twitter might also have to change its market position, even if it tries to win back advertisers.

Bailey said that “the most appropriate comparison to Twitter right now is when parents and aunts, uncles, grandparents got Facebook accounts.” While Facebook share prices plunged in the wake of this, Bailey said that they weren’t alarmed and instead positioned themselves as a relationship facilitator rather than an enabler for youthful expression. Facebook has been around since the beginning, with some tweaks to their business model and uncomfortable House hearings. However, they won’t be the ‘disruptor’. Facebook is an information-exchange commodity.