Twitter's U.S. ad sales plunge: Report

Twitter's U.S. ad sales fell sharply for the 5 weeks beginning April 1, according to the New York Times. The Yahoo Finance teams breaks down the report.

Video Transcript

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SEANA SMITH: Let's take a look at some of the top trending stories. Yahoo Finance's Alexandra Canal, Josh Schaffer joining us here at the table. First up, let's talk about Twitter. US advertising revenue down 59% in the month of April from a year ago, according to a report out here from The New York Times today. The company also expecting company forecasting that its US ad revenue this month will be down at least 56%.

A new CEO taking over the job. Akiko, she has a tough challenge ahead of her in order to try to get back some of that lost revenue.

AKIKO FUJITA: Yeah. Like on the one hand, it's not surprising that it's been down when you consider just that the bumpy ride it's been since Elon Musk. But it's surprising, because it's now a private company. We don't usually get these numbers. An important reminder, 90% of Twitter's revenue came from ads before that. And that's a huge problem.

Linda Yaccarino now stepping in to huge challenges. Advertisers don't want to put their money behind content that is controversial, which Twitter has been.

JOSH SCHAFFER: And it just gets back to two. It's hard to recreate and reinvigorate growth when you're talking about Twitter right now, when you think about just rebuilding in this environment, right? People are spending less on ads in general. I think that's important to highlight here, too. People are spending less on ads overall.

So then if I'm a company and I can spend on Instagram or TikTok, one of the more popular social media, where people are having more sales success, I'm going to spend there. And then I just don't have money to go to Twitter, right? And I think Twitter is dealing with that to some respect, too, where their ad budgets are overall shrinking right now. And so why would I spend money on Twitter when I can spend money on an app or a social media platform that quite simply more people are on?

ALEXANDRA CANAL: Yeah. And to that point, it's not just tech Giants dealing with this. We also have media companies, like Warner Brothers, Discovery, and Paramount. We're seeing that in their earnings reports. Spotify and audio company, that we're going to talk about in just a bit, also dealing with this ad slowdown.

And there was a rise of reported hate speech on Twitter that spooking some advertisers. But you have to think of other ways that Twitter could potentially monetize ads. We've been talking about Twitter Spaces, how that could be a lucrative opportunity for advertisers, especially since they've had some notable names on the platform recently, like Ron DeSantis, Ford CEO Jim Farley, just to name a few. So those could be moments where advertisers can say, look, that could be a good opportunity.

JOSH SCHAFFER: We're in some kind of shopping aspect, right? I feel like all the other social media apps I use now prompt me to shop within the app, like Instagram, Facebook. And you get sort of benefits from shopping within the app. Twitter never does that for me. So what am I getting out of the ad?

AKIKO FUJITA: And when you think about it, you know, one of the first things that Elon Musk talked about was charging for that blue checkmark. That hasn't really worked out well. That was supposed to be one of the big revenue drivers or at least one of the levers.

SEANA SMITH: Well, I was going to say, and also just the fact that he did remove that blue checkmark, a lot of people don't use Twitter like they did a year ago, two years ago. So you don't have that trust there. You don't have people as reliant on Twitter for news, given the fact that so many people are not paying for that checkmark. Yes, some people have still been given that checkmark, and they're not paying for it individually. But I think a lot of people are kind of second-guessing the information that they get on Twitter even more than they were before. And that's going to hurt advertisers' willingness to spend as well.

AKIKO FUJITA: Well, case in point, we saw that image, right? The AI-generated image of a supposed attack that wasn't in the Pentagon that had a blue checkmark. So that points to some of the challenges Twitter has.