Twitter is shifting its ad strategy—bringing in more lesser-known brands seeking clicks rather than more prominent brands seeking exposure.
Key Details
- In 2021, around 85% of Twitter’s annual ad revenue came from brand advertising budgets and the rest from performance advertising, the company says.
- The company aimed to increase the ratio by generating more performance-based ads on the platform.
- Elon Musk’s acquisition pushed the company toward that goal as major brands such as Coca-Cola Co., Mondelēz International Inc., Mars Inc., and Best Buy Co. paused ad spending, but lesser-known brands have increased spending.
Why it’s news
When Elon Musk took over Twitter in 2022, he aimed to make the platform focused on free speech, but many brands worried the free speech would mainly consist of hateful language and paused all ad spending.
Twitter makes nearly all of its money from ad spending, and when large brands paused their spending, the company started losing money quickly.
Now Twitter has shifted its ad focus to lesser-known brands rather than the more prominent popular brands it once filled with, and many small companies are spending thousands on Twitter ad spending monthly.
Large brands such as Coca-Cola bought ads just for exposure and calculated how many people saw the ads, but smaller brands measure differently by measuring how many clicks or actions are taken on the ad.
1440 Media LLC is one company that went from spending nothing on Twitter ads to buying nearly six figures’ worth of ads each month, according to The Wall Street Journal.
It hasn’t been measured yet whether this influx of smaller brands buying ads will help Twitter fully recover from what it lost after large brands that were able to spend a significantly higher amount of money left.
