*This article is a paid service of DIGIDAY[Japanese version]a media for next-generation leaders who are responsible for branding.DIGIDAY+This is a reprint from “.
- Twitter used to play a key role in Super Bowl campaigns, but after the acquisition, it has been treated as a supporting role and is losing its presence in the advertising industry.
- Linda Yaccarino’s appointment as CEO has raised expectations within the industry, but advertisers are only spending a fraction of what they used to on Twitter, leading to a sudden spike known as the “Yaccarino bounce.” No recovery was observed.
- Advertisers tend to keep their spending to a bare minimum due to Elon Musk’s public criticism and abuse. According to a NYT report, advertising revenue from April to May 2023 is down 59% compared to the previous year.
Twitter, once one of the core social platforms for many Super Bowl campaigns, has now become more of a supporting role. That situation lasted until May 2023, when Linda Yaccarino, formerly of NBCUniversal (NBCU), took over as Twitter’s CEO.
Then marketers began to get hopeful. As Digiday reported at the time, we thought we had finally found “someone who understood us.”
Group M, the media agency giant, is so optimistic about Twitter’s leadership change that it has started encouraging its advertisers that spending on Twitter is no longer a big risk. But despite all the hype, Twitter hasn’t actually seen a big increase in spending. The “Yaccarino bounce” rapid recovery that many had hoped for did not materialize.
In fact, one advertising executive who has negotiated with many Twitter advertisers over the past year says advertisers are indeed coming back to Twitter, but only for a fraction of what they were paying before the acquisition. It was confirmed that no money was spent. Additionally, many advertisers are spending minimal amounts because they don’t want Mr. Musk to publicly name or abuse him online.
*Vol.1 ishere
What the numbers say
And the numbers don’t lie.
From April 1st to the first week of May, Twitter’s U.S. ad revenue was $88 million (approx. billion yen), down 59% from the previous year.
The document said the company consistently missed weekly sales forecasts, sometimes by as much as 30%. And the report is consistent with ad revenue numbers from a recent follow-up study by Guideline. According to the report, despite the change to Mr. Yaccarino in May, Twitter’s ad revenue was down an average of 55% year-on-year, and 61% year-on-year from May to August. %, and the decline was even wider.
In short, getting advertising back to the levels it was at before Musk’s acquisition is an incredibly high hurdle. Even if we manage to reach it, it may not be enough.
In fact, marketers weren’t keen on investing heavily in Twitter before Musk came on the scene. Considering the current state of this platform, it is undeniable that even if we call for a large investment, it is one of the most difficult challenges in the advertising industry today.
The challenge is further complicated for Yaccarino by Musk’s habit of repeatedly making controversial statements. This makes it difficult for marketers to trust Mr. Yaccarino’s words. Add to that the fact that Mr. Yaccarino, who would have been a well-known media mogul, as evidenced by recent interviews with CNBC, The Financial Times, and Code Conference. , it looks like it’s just a way to explain Musk’s actions.
“Mr. Yaccarino was a big advertiser on Twitter at NBCU,” Pascalis said. “She was very knowledgeable about Twitter and the huge power that it has. So she has a working knowledge of the experiential side. She’s just learning the management side of things right now. “There’s no one better at making money on the internet, but it’s unclear whether she can overcome the current obstacle Musk poses to restoring large ad spends.”
X is becoming more and more distant
But Twitter (or should I say X) is now owned by Mr. Musk. Although it has a deep relationship with the advertising industry, it has become an increasingly distant platform.
Nowhere was this more evident than in the last 12 months at Cannes Lions in June. The luxurious Vice Presidential Suite 140, located on the ground floor of the JW Marriott Hotel in Cannes, has a 68 square meter terrace and a 50 square meter lounge and can accommodate 80 people, but it will not have the same capacity as in previous years. There were no large delegations, no beach occupations, no flashy partnerships.
In their place were about 10 selected executives of X. The team includes Chris Reedy (former VP of Global Sales & Marketing), Alex Josephson (VP of Brand Creative), and Tim Perzyk (VP of Marketing & Research). The purpose was two-fold, said attendees at the local festival.
First, it will step up its collaboration with current and potential partners, while also moving aggressively into the realm of brand safety solutions. The second mission is to rebuild connections not only with existing clients, but also with advertisers who had temporarily suspended advertising spending due to Mr. Musk’s arrival.
As Reedy and other delegates met with marketers overlooking the Croisette Boulevard in Cannes, southern France, one company executive in attendance said one thing was clear: Ta. That said, members of Twitter’s delegation weren’t freaking out about the current state of the company’s advertising business. In fact, in front of the marketers with whom they do business, they behaved in what could be described as almost business as usual. This hand-picked team will work to prepare for the subsequent brand safety partnership with ad tech company IAS, engage new partners, and restore lost advertiser trust starting in November 2022. I started on it.
In some ways, Twitter’s presence at Cannes was emblematic of how much business has changed for marketers, for better or for worse, especially since it changed its name to X in July. Former Twitter employees created the hashtag “#lovewhereyouworked,” but one advertising firm that worked with the team before and after Musk’s rise said they felt it had overreached in terms of staffing and corporate culture. executives say. He added that the team is now more streamlined, able to communicate faster and have a greater sense of commitment to their work.
Can we expect positive changes?
It’s been almost a year since Musk completed his $44 billion (about 6.4 trillion yen) acquisition of Twitter.
Starting in September 2023, selected marketers will attend X’s first Client Council meeting (held on September 20th) to discuss the company’s new video advertising proposals and visit X’s offices in San Francisco and New York. I had the opportunity to meet with the company’s advertising team at their office. In many ways, the new product announcements and series of meetings reflect much of what has happened over the past year.
Until now, marketers have often felt like it’s the same thing over and over again, like an endless loop between the unstoppable and the immovable. Marketers complain, and Musk and his team listen and make adjustments to their advertising operations. Sometimes it aligns with marketer feedback, and sometimes it doesn’t quite meet expectations. Perhaps X – and this is a very important hypothetical – will bring similar big changes in year two, changes with even more positive potential.
No comments were received from X for this article.
[Original text]
(Text: Krystal Scanlon, Translation: SI Japan, Editing: Shohei Wakeshima)
Source: BusinessInsider
Emma Warren is a well-known author and market analyst who writes for 24 news breaker. She is an expert in her field and her articles provide readers with insightful and informative analysis on the latest market trends and developments. With a keen understanding of the economy and a talent for explaining complex issues in an easy-to-understand manner, Emma’s writing is a must-read for anyone interested in staying up-to-date on the latest market news.