Despite all the discussion of censoring and checkmarks, Twitter’s primary problem existed even before Elon Musk took control of the service: revenue. Musk soon got to work attempting to stop the platform’s financial bleeding. Several board members and roughly half of the company’s personnel were let go in an effort to bring expenses under control. The issue with revenue was more serious, and Twitter’s new CEO has been desperately trying to develop sponsored programs like the updated version of Twitter Blue in an effort to increase revenue.
Unfortunately, things aren’t so easy for the richest man in the world. The installation of New Blue and the modifications it made to the verification system have been somewhat disorganized. Even worse, many advertisers have retreated until they can determine the precise course that the platform is taking. Currently, advertising accounts for 90% of Twitter’s revenue, so a decline in ad sales may make it even more difficult for Musk to recover some of his $44 billion.
Several well-known, billion-dollar businesses have officially said they won’t be purchasing Twitter ads at this time. General Motors, Volkswagen, Audi, pharmaceutical giant Pfizer, and Mondelez International—the maker of Oreo cookies—are also on the list. Vehicle makers are among the companies who have retreated, which may indicate that a potential conflict with one of Musk’s other enterprises, Tesla, is a consideration. The main justification offered appears to be Musk’s aspirations to turn Twitter into a “free speech” medium, which have caused advertisers to be concerned that their brands’ advertisements would appear alongside hate speech, extremist viewpoints, and false information. In an open letter that was published just before the takeover closed, Musk made an attempt to squash those ideas, but it doesn’t seem to have been successful.
The impact of the ad exodus may be significantly lessened by the intervention of another one of Musk’s businesses. According to reports, SpaceX splurged on one of the most expensive advertising packages available. The company, which is focused on space exploration, has rarely purchased prominent ads on the site, so the action is atypical. The advertisements will promote Starlink, a satellite internet service offered by the business that is operated by SpaceX but is far distinct from the NASA partnerships and space travel that the business is better known for.
The advertising packages SpaceX ordered can cost up to a quarter of a million dollars, and they can keep a brand at the top of people in the targeted area’s timeline for “a full day,” according to CNBC’s interview with “current and former” Twitter employees. On each day the company has paid for, the brand messaging appears the first three times users open the app. The customers in question reside in Spain and Australia, the countries where the advertising bundles were bought. The material in the narrative is also supported by “internal records” from Twitter, according to CNBC.
Musk debunks the claims
Shortly after the report went public, Musk used his new platform to deny it. According to him, the purchase was more of a test than a bailout “To test the efficacy of Twitter advertising in Australia and Spain, SpaceX Starlink purchased a small-scale ad package. similar for FB, Instagram, and Google.” Using one of his own businesses would most likely be the most accurate way to gauge the effectiveness of an advertisement, so Musk’s story is certainly plausible.
He has full access to information from both SpaceX and Twitter’s advertising division, so a lot of it may be accurately assessed. Musk’s tweet appears to match the locations mentioned in the CNBC piece accurately, but he denies the size of the ad packages involved, calling them “small” in comparison to some of the biggest and most expensive bundles Twitter now offers.