RFI interviewed Emmanuelle Patry, founder of Social Media Lab in France, about the reasons behind Twitter’s plummeting revenue. The Achilles heel has been the change in the moderation rules, particularly their relaxation.
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The consulting firm Insider Intelligence estimated in May that revenue from the social network would decrease by a third in 2023 compared to 2022, which is indeed being confirmed. A few days ago, Twitter CEO Elon Musk announced that the Twitter platform, which he owns, has lost half of its advertising revenue.
“It is true that the erosion of income in social networks is general, since more and more platforms are competing with each other,” says Emmanuelle Patry, founder of Social Media Lab, a French training organization specializing in digital markets and social networks. “However, the arrival of Elon Musk at the head of Twitter last October precipitated the flight of advertisers from this social network,” she points out.
For Emmanuelle Patry, this significant drop in Twitter advertising revenue is related to several factors. Among others, the fact that “Facebook and Twitter, which were once dominant, now face competition from other networks, including internal ones, such as Instagram, which competes directly with Facebook within the Meta group. This phenomenon has been occurring for several years,” he told RFI.
In addition, Musk “made a series of scandalous decisions when he arrived at Twitter, among others, he fired a part of the historical teams and completely changed the corporate culture,” recalls Patry.
But what has contributed the most to the deterioration of Twitter’s income has been the change in moderation rules, according to this specialist. “An advertiser needs a platform with quality content so that their image is associated with that quality. However, with the relaxation of moderation rules, a lot of hate has spread, negative reviews and extremism have exploded around the world This represents a serious problem for advertisers, as they need a safe environment, they do not want their image to be associated with extremism, racism and other issues of that nature, which are increasingly present on Twitter, “he stresses.
But then, where are the advertisers who have turned their backs on Twitter heading? Networks like TikTok have already captured some of the hype, as has Instagram, which has gained momentum since its acquisition by Facebook and has become a hugely popular platform for reaching young people.
When social networks emerged, they were platforms to attract young people, but now Twitter has completely lost that monopoly, and it is important that the offer is attractive to advertisers. Twitter has experienced declining user numbers for several years, and current scandals make the platform far less attractive.
In May, Elon Musk named Linda Yaccarino, a publicist for NBC Universal, as the head of Twitter. Why was her tenure not perceived as a positive sign for advertisers?
It was a successful strategy, linked to a vision more aligned with the expectations of the advertising market and advertisers. However, it has not been enough. Revenues had already been declining in recent months, and the arrival of Threads (a new Twitter-like, text-based, interaction-based Meta network) hit the market ten days ago has further dampened Twitter’s recovery potential. Although it is still possible to reverse the situation, if other measures like this are taken, Twitter is currently in a very delicate situation.
