Expert predictions have forecasted that Twitter’s ad revenue is expected to plummet by 28% in 2023.
This is according to a carefully respected prediction released on Tuesday, as the network suffers under Elon Musk’s ownership.
Insider Intelligence analysts reduced an earlier global revenue forecast of $4.74 billion by more than a third to $2.98 billion as trust in the platform deteriorates.
“The biggest problem with Twitter’s ad business is that advertisers don’t trust Musk,” said Jasmine Enberg, principal analyst at Insider Intelligence.
“Twitter needs to unravel Musk’s personal brand from the company’s corporate image to regain advertiser trust and bring back ad dollars,” she added.
Following Musk’s turbulent takeover of Twitter, several significant advertisers have already suspended their activities after the Tesla magnate relaxed the rules for content moderation and fired more than half of a 7,000-person workforce.
Since Musk assumed leadership of the company on October 27, fourteen of the top 30 Twitter advertisers have stopped running campaigns, according to research firm Pathmatics.
Musk’s efforts to develop a subscription service “won’t make up for the lost ad revenue,” according to Insider Intelligence.
With Insider Intelligence predicting a two-minute decrease in time spent on the platform to 34 minutes per day – TikTok users stay on the app for almost an hour — Musk’s leadership has also chilled Twitter’s remaining users.
According to Insider Intelligence, the decrease in usage was brought on by the platform’s growing amount of hostile content, technical issues, and an inability to enter the social video market and compete with TikTok.
“Twitter engagement is still heavily dependent on the news cycle,” said Engberg. “The takeover saga caused a spike in time spent in 2022 that has now dissipated, as users have lost interest in Musk’s antics.”
Musk is scheduled to appear at a major marketing conference in Miami on April 18 in an apparent bid to entice major sponsors to return to Twitter.
Musk paid $44 billion for Twitter, but he has now written it down to half that amount.
