Elon Musk’s Twitter is facing a steep slump in ad revenues in 2023, according to digital research company Insider Intelligence, which is forecasting just $2.98 billion for the year, down from its forecast last October of $4.74 billion.
The main reason is that advertisers don’t trust Musk.
“With three-quarters of its staff gone, a flurry of policies being introduced and sunsetted, and Musk’s controversial image, Twitter has a long way to go before it can win back the trust of both advertisers and users,” the company said in a new report.
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Twitter is aiming to make up for the ad revenue shortfall with subscription revenues, “but it won’t succeed,” said the report.
Twitter Blue has chalked up just $11 million from mobile subscriptions in its first three months, according to Sensor Tower data reported by TechCrunch.
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Insider Intelligence reaches estimates by analyzing many elements related to the ad business, including macro-level economic conditions, historical trends of the ad market, historical trends of each medium in relation to other media, data from benchmark sources, consumer media consumptions trends and interviews with executives at ad agencies, brands, media publishers and others.
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Chief Executive Musk acquired Twitter last October for $44 billion. Within weeks, he had laid off more than half of its staff, which now numbers less than 2,000 compared with 7,500 when he took over.
The cuts affected product managers, data scientists and engineers who worked on machine learning and site reliability, roles that help keep the company’s various features up and running.
The monetization-infrastructure team, which maintains the services that make money for Twitter, was cut to fewer than eight people from 30, one of the sources said.
Musk has also reportedly stiffed vendors and clashed with landlords after failing to pay rent on some of the company’s offices.
See also: Elon Musk apologizes to laid-off Twitter employee who was Iceland’s person of the year in 2022
