The latest move in Musk’s never-dull life sent shockwaves through the social media sphere. Millions of users logged off for the last time, Tweeps (what Twitter employees call themselves) left, and advertisers scurried away. 

After all, Musk hates ads, so why would brands stick around? 

Many of them didn’t. 

In short order, more than half of Twitter’s top 1,000 advertisers, including Coca-Cola, Jeep, Merck, and Unilever, put their Twitter budgets on hold. 

But it’s been over a year since Elon took the reins of Twitter, and recently said that “Almost all advertisers have come back.” 

Is that the case? 

According to MediaRadar data, advertisers from 10.2k companies (up by 13% YoY) spent more than $774mm on Twitter between January 1, 2022, and May 31, 2023, representing a 2% YoY decrease. (For context: Musk reached a deal to acquire Twitter on April 25, 2022.) 

Overall, spending in Q1 2023 fell by 3% YoY to $444mm, while April and May both saw decreases of 1% YoY. 

So what’s really up with Twitter’s ad business a year into the Musk era? 

Was it doomed from the start, or is there a reason to be optimistic? 

Spending Slowed By Finance Advertisers

Declining ad revenue is never a good sign and often signals trouble on the horizon. But Musk took the helm during a tough time for advertisers, especially those in the finance industry. 

Overall, spending on Twitter from financial institutions and services advertisers fell by 65% YoY to $32mm between January 1, 2022, and May 31, 2023. 

Unsurprisingly, MediaRadar saw spending from digital currency (crypto) advertisers fall by 79% YoY from $26mm to $5.5mm. 

For these advertisers, the sharp decline comes following rampant spending and industry growth. Through October 2022, crypto-related advertisers spent $223mm, up 150% from $89mm in 2021. 

Much of that spending came from advertisers at Crypto.com who shelled out millions to sponsor the 2022 World Cup, buy the naming rights to former Staples Center in Los Angeles, and run a Super Bowl ad. 

But their stock turned quickly. 

The collapse of crypto exchange FTX, the massive devaluation of Coinbase, and the bankruptcy of Blockfi disrupted the industry; the crypto winter arrived, and advertisers felt it. 

The CEO of performance marketing firm Headlight, Grant Harbin, said, “Crypto winter is a crypto advertising winter. There’s probably very little consideration on scaling advertising budgets right now.”

At the end of the day, crypto advertisers would have pulled back on Twitter regardless of who was at the helm.

The same goes for banking advertisers who collectively dropped their Twitter budgets by 83% YoY following the collapse of Silicon Valley Bank (SVB), diminishing consumer confidence, and slowing loan growth.

One ad executive told Digiday that they immediately started working with investors to thrash out a bridge loan, while another executive said their ad tech business lost all of its funding because of the financial meltdown. AcuityAds, which had over 90% of cash in SVB, even had to halt its stock trading.

Big Brands Give Twitter a Second Chance

In November 2022, Twitter’s biggest ad buyer, GroupM, began telling its customers, including Google, L’Oréal, Bayer, Nestle, Unilever, Coke, and Mars, that buying ads on the platform was a “high-risk move. The announcement came on the heels of the mass departure of Twitter executives, high-profile impersonations by “verified” users, and concerns about Twitter’s ability to comply with the Federal Trade Commission’s (FTC).

GroupM’s warning was a worst-case scenario for Twitter, which has historically relied almost exclusively on ad revenue to keep it above water. Fast forward a few months, and those fears seem to be lessening. Not only has GroupM removed Twitter’s “high-risk” status, but the number of companies advertising on Twitter is increasing. 

According to MediaRadar data, the number of companies buying ads on Twitter in Q1 2023 increased by 29% to 8k (from 6.2k advertising in Q1 2022). That surge continued into Q2, with the number of companies buying jumping by 34% YoY in April to 4.8k companies. That said, the number of companies fell in May by around 25%. 

Even more promising is that many companies are spending big. 

Companies that spent more than $5mm on Twitter between January and May 2023:

• Amazon (+46% YoY) 
• Apple (+68% YoY) 
• Buzzery (+1,000% YoY) 
• Comcast Corporation (-41% YoY) 
• Hewlett Packard Enterprise Development (+1,000% YoY) 
• IBM (+643% YoY) 
• Monday.com (+96% YoY) 
• The Motley Fool (+1,000% YoY) 
• The Walt Disney Company (-50% YoY,
• Warner Bros. Discovery (+330% YoY) 

Outside of The Walt Disney Company and Comcast Corporation, these industry giants are regaining trust in Twitter, collectively spending $246mm or 32% of the overall investment in Twitter ads during this time. 

As Twitter regains the trust of advertisers with deep pockets, those with less to spend will naturally grow more comfortable, which is even more good news considering nearly 70% of the companies that invested in Twitter spent less than $10k (these advertisers were responsible for just 2% of the overall investment through May 2023.) 

What’s Next for Twitter Advertising? 

Elon Musk has a history of ruffling feathers, but he also has a penchant for turning everything he touches into gold. Betting against him to restart Twitter’s advertising engine probably isn’t the best idea. 

Although ad revenue is down, there seems to be a path forward under new CEO Linda Yaccarino, who helped overhaul NBCUniversal’s advertising sales business and launch its ad-supported streaming platform Peacock in 2020.

In May, Twitter extended into open-programmatic advertising, making its inventory available to outside parties for the first time and, more importantly, easier for ad dollars to flow through its walls. 

It’s a savvy move but not unexpected.

“It’s almost like Twitter doesn’t really have a choice but to go down the ad tech route because they need to explore every avenue they can to fortify that ad revenue stream following the changes made to policies and content moderation as well as the loss of personnel,” said Evelyn Mitchell, a Senior Analyst for Digital Advertising and Media at eMarketer. 

Twitter also plans to focus on video, creator and commerce partnerships to introduce revenue streams beyond advertising. 

So, what’s next for Elon? More innovation, efforts to regain advertisers’ trust, and a cage match with Mark Zuckerberg. 

For more insights, sign up for MediaRadar’s blog here.

Despite playing second (or third, or fourth) fiddle to other social advertising powerhouses, and a few odd headlines (yes, we’re talking about Elon), Twitter’s doing what it can to hang onto its share of advertising budgets.

Through August 2022, nearly 10.6k companies promoted more than 12.4k brands on Twitter, collectively spending $1.1b. 

How does that stack up to the other major social players? 

It doesn’t—and it’s not even close. 

In 2021, Facebook generated almost $115b in ad revenue. 

Meanwhile, Instagram’s ad revenue remained below $30b, but its revenue growth is outpacing Facebook’s.

Whatever way you look at it, Twitter is a little fish in a vast pond. 

Still, more than $1b in ad revenue in less than a year is nothing to snuff at, nor are the 10.6k companies investing in Twitter ads this year. It’s also worth noting that Twitter’s ad revenue has increased every year since 2011. 

While Twitter’s certainly struggling to maintain its status as a social advertising giant, it’s refusing to go down without a fight—and recent headlines may be what it needs to stay in the game.

Here are three interesting facts about the state of Twitter advertising and what they mean for the future of the social media pioneer.

Twitter’s Still Got “It”

Since Elon Musk let the world know that Twitter was on his wish list, there’s been an undeniable uptick in interest from crypto aficionados, finance enthusiasts and Elon loyalists (more on that in a minute). 

This prompted advertisers with these audiences to head to Twitter, eager to get in front of these more niche audiences.

Between January and August 2022, the top advertisers on Twitter came primarily from industries tied to Finance and Entertainment, including Streaming Services, Digital Currency, and Banks. 

The top-spending category through August, Subscription Streaming Services (AppleTV+, HBO Max, Disney+, etc.), spent more than $53mm on Twitter.

Meanwhile, cryptocurrency advertisers, including Chain (Web3 and blockchain infrastructure) and Crypto.com, combined to spend $38mm.

Other Twitter advertisers during the first 6 months of 2022 included Bank of America, Capital One, and entertainment websites Daily-stuff.com, Herald Weekly, Kueez, and Parent Influence.

In this case, all press is good press may be true–the uptick in Twitter interest has certainly attracted advertisers, too.

Twitter Has Widespread Appeal

On the surface, it may seem like Twitter is becoming a niche social advertising world that caters to a smaller subset of companies.

But the numbers show that’s absolutely not the case.  

In fact, advertisers from these industries accounted for just 19% of Twitter’s total ad investment through August. 

Advertisers for Athletic Wear companies, in particular, including those from Adidas, Fabletics, and Nike, spent big, dishing out more than $25mm on Twitter ads.

What does this advertising variety tell us about the state of Twitter advertising? 

Two things:

1. Twitter is definitely becoming an increasingly popular option to certain advertisers who align with Elon Musk’s persona. This will continue.   
2. Twitter ads still have widespread appeal, albeit on a much smaller scale than other platforms. This should continue.  

Long term, it seems likely that more Elon-aligned advertisers will invest, but as long as Twitter users continue to exhibit behaviors that are appealing to all—53% of people on Twitter are more likely to be the first to buy new products—a broad spectrum of advertisers will keep their wallets open.

It’s Go Big or Go Home

Here’s another indication that Twitter advertising is holding on: The advertisers who really invested did so in big ways. 

During the first 6 months of 2022, around 200 companies (each spending more than $1mm), including Crypto.com and Intel, accounted for 74% of the platform’s total ad investment. 

Lower that investment to $500k and these relatively big spenders accounted for 82% of Twitter ad spending.

A handful of companies, including Apple, Meta, MGM Resorts, Progressive, and Warner Bros Discovery, took it a step further, each spending more than $10mm.

This tells us that Twitter remains in play for advertisers with deep pockets, which makes sense since smaller advertisers generally don’t have the risk appetite required to stomach an investment in Twitter. 

Frankly, there are safer bets out there—think Facebook and OTT—during a time when advertisers have to maximize their budgets.  

What’s telling is that most Twitter advertisers are spending less than $50k. That said, the fact that these advertisers accounted for just 4% of spending gives us a pretty good idea of what most advertisers are thinking.

They’re waiting to see what happens.

While Twitter has certainly fallen off in recent years, it’s still a significant player in the social world. 

The lingering ad spending despite so much uncertainty surrounding the platform strongly indicates that advertisers without big budgets are in a holding pattern.

The next few months will be extremely telling.

The Elon Effect

After months of back and forth that included bot concerns, a “rescinded” offer, and a whistleblower, Twitter stockholders officially approved the acquisition. 

While the Elon saga has brought Twitter into the headlines and given the oft-struggling platform some life, early signs suggest that the move may backfire—at least from an advertising standpoint. 

Since news broke in April, the number of Twitter advertisers has steadily declined. 

Despite an initial increase between April and May—around the time the news broke and excitement was at an all-time high—the number of advertisers spending on Twitter went from 3.9k in May to 2.3k in August. 

A lack of new advertisers supports the suggestion that the acquisition may come back to bite Twitter. 

Prior to July, more than 1k new advertisers were spending on Twitter every month. In July and August, that number dropped to 200. 

So, what gives? 

The likely answer stems from the uncertainty surrounding Twitter’s future and what will become of its advertising ecosystem now that Musk’s in control.

While the continued investment from big brands indicates that Twitter probably won’t go away anytime soon, the decline in the number of advertisers, especially new ones, is problematic.

With Musk officially at the helm, Twitter’s ad strategy should start to come into view.

As it does and advertisers respond—either by pushing further into Twitter or heading for the exit—we’ll get a much better idea of what the future holds for the once dominant social media player. 

Growing Pains at an Old Age

More times than not, growing pains are associated with early-stage startups and social platforms trying to carve out market share. 

Twitter, which is nearing its 20th birthday, is experiencing them later in life. 

That’s good and (maybe) bad.

On the one hand, it was sink or swim for Twitter; a pivot of some kind was necessary to keep it above water. Twitter decided to swim, albeit using a stroke no one saw coming.

On the other hand, it doesn’t look like advertisers are eager to give Twitter their vote of confidence—at least not yet. 

In reality, Twitter and its advertisers are in a waiting game and only time will tell what the future holds.

For more insights, sign up for MediaRadar’s blog here.