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Twitter's Ads Problems Are Even Worse Behind the Scenes

Teams that run critical ad systems dwindle to one or two staffers. Lost ad revenue adds up during what should be the most profitable time of the year.

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Photo: Gregory Bull (AP)

Among Twitter’s multiform ongoing disasters, the one that threatens its financial prospects the most is perhaps fleeing advertisers. Elon Musk’s latest complaint on the topic finds him picking a public fight with Apple, suggesting the iPhone maker pulled its Twitter ads because “they hate free speech in America.” Behind close doors, Twitter’s advertising problems are only getting more dire. Reports say ad revenue losses are pilling up, and layoffs to Twitter’s ad technology teams may worsen the problems that are already scaring advertisers away.

Twitter’s ad revenue in Europe, the Middle East, and Africa is down 15% in 2022, and weekly advertising bookings in the region are down a stunning 49%, according to internal company discussions reviewed by the Platformer newsletter. That would be bad news any time, but it’s disastrous during the Black Friday shopping season, the most profitable time of year for ad companies by far. The lost opportunity is even worse considering the World Cup is on, another factor that should drives up ad sales. One former Twitter executive told Platformer the situation is “catastrophic.”

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New reports suggest that Twitter’s mass layoffs and resignations hit critical ad technology teams. Musk wants to change Twitter’s business model through schemes like subscription fees for verified accounts, but any significant revenue from that program is a long way off. In the meantime, advertising is essentially the only way Twitter makes money, and Musk is flailing to turn the company’s ad problems around. So far those efforts have failed, and the layoffs to the metrics teams could make the platform even less appealing to advertisers going forward.

Staffing losses are particularly steep among Twitter’s measurement and analytics teams, according to sources who spoke with Ad Age. These personnel run absolutely essential advertising technology. That includes systems that calculate how well ad campaigns are working and tools that ensure brand safety, the industry term for checking to make sure that ads aren’t running next to offensive or otherwise damaging content. According to Ad Age:

“The Audience Insights unit, which was heavy with technical talent and looked at conversation volume and trends and worked with Twitter sales and marketing teams, lost 70% of its staff,” the source said.

“The Advertising Research group that worked with client teams for big advertisers such as Samsung, Verizon, AT&T and Google, doing custom studies and handling third-party measurement, also lost more than 70% of its people, this person said, leaving only two to handle prioritized work for a host of tech and telecom advertisers.”

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Gizmodo tweeted at Elon Musk for comment. We also emailed the company’s communications team, though it’s nonexistent after layoffs and resignations. We’ll update this story if we hear back from either one.

Many advertisers, especially big spenders, rely on analytics data to measure who’s seeing particular ads, and whether or not those people are driving sales and other consumer behavior. Those metrics are used to adjust ad campaigns on the fly. Without that ability, running an ad is basically a shot in the dark. So far, advertisers haven’t gone public with issues with Twitter’s analytics, but if problems crop up with measurement tools, Twitter’s remaining advertisers may look elsewhere. There are plenty of competing ad platforms where brands can take their advertising dollars if or when Twitter’s ad analytics systems start to break down.

Some of Twitter’s biggest advertisers have, in fact, expressed public dismay over brand safety concerns with Twitter, including major companies like United Airlines and General Motors. Both companies paused their ad campaigns over concerns that the new CEO would invite a wave of unpleasant content onto the social media platform.

Those fears were realized. Hate speech skyrocketed on Twitter amid Musk’s takeover, with use of the N-word up 500%, according to one report. More recently, the new CEO announced a “general amnesty” for banned accounts, welcoming users who violated content rules back onto the platform and reportedly ending Twitter’s COVID-19 misinformation policy. Twitter also re-verified several notorious neo-Nazis.

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If reported layoffs are any indication, brand safety problems may get worse as the teams who helped advertisers dwindle. And in a system built on accountability and trust, the situation is exacerbated by Musk’s erratic behavior and conflicting messages. Just days ago, Musk was on Twitter touting how brand safety issues are improving:

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