Twitter experienced a 40 percent decline in advertising revenue since this time last year as more than 500 advertisers paused their spending, the Information reported Jan. 17.
The social media company’s advertising problems began before its sale, but escalated when Elon Musk took over in October. Many advertisers decreased or delayed their spending when Musk became CEO to see what direction the platform would take under new leadership. Twitter relies on advertising revenue, so the move was a major blow to the company that hasn’t earned a profit since 2019. Musk tried to incentivize advertisers by offering buy-one, get-one free sales to its biggest spenders and allowing political ads.
General Motors, Pfizer and United Airlines are among the companies that stopped showing ads in November. Some advocacy groups and marketing firms advised their clients to do the same.
Musk has taken cost cutting measures to preserve its bottom line, which include laying off the majority of the company’s workforce and not paying rent on multiple office buildings.