Twitter is in the midst of an advertising crisis, with brands reportedly pausing spending amid fears of a rise in divisive content on the platform.
To come out of it, Elon Musk is planning to turn things around by offering free ads to existing advertising brands.
Twitter’s Ad Crisis
The ad crisis comes after Twitter earlier this month announced that it would relax its total ban on political adverts. It has been previously reported that General Motors and Pfizer, paused spending amid fears of a rise in divisive content on the platform, after Musk’s botched relaunch of Twitter’s subscription service.
That said, some advertisers have reportedly reinstated their advertising spend on the platform. But research firm Pathmatics has noted that about 70 percent of Twitter’s top 100 advertising clients were not spending on the platform as of mid-December. Advertising of course is Twitter’s main source of revenue, accounting for 90 percent of its $5.1bn turnover in 2021.
In November, Musk raised the possibility of the platform going bankrupt during his first mass email with the platform’s remaining staff. A sign of financial strain at Twitter emerged recently when a landlord in San Francisco and London sued Twitter over unpaid rent for its office space.
Musk’s Offer of Free Ads
With the financial crisis in mind, Musk is reportedly planning to offer free ads to existing advertising brands on the platform, in order to drive more engagement and convince advertisers to return.
The move would be part of a wider push by Twitter to promote user engagement over political content, with the company announcing it will start offering rewards for users who create interesting tweets and quote-tweeted content.
The platform is also reportedly looking to launch more interest-based targeting options and a new suite of tools aimed at helping brands better understand their campaigns performance, likely in an effort to encourage more advertising spend on the platform. Whether these efforts will be enough to bring back advertisers to the platform remains to be seen, but it’s clear that Musk is looking for innovative solutions to help Twitter turn its fortunes around.
However, Twitter is also planning to launch Twitter with zero ads as Musk himself tweeted about it. However, it will be with another price for sure – maybe with another subscription policy!
Also, there will be a higher priced subscription that allows zero ads— Elon Musk (@elonmusk) January 21, 2023
Is Offering Free Ads a Good Strategy for Twitter?
Offering free ads on Twitter is certainly an ambitious move, and could be a potential lifeline for the platform if it works. However, free advertising might not actually be enough to spur more spending, as many brands are already cautious about what content is being shared on the platform.
Additionally, offering free ads could also backfire, as this could end up being an added expense for the platform and could put a strain on already-limited resources. Ultimately, it will be up to Twitter to determine whether offering free ads is worth the risk. If done correctly, it could help bring back some of the advertisers who have left Twitter in recent months.
Twitter’s advertising crisis has been well documented, and the platform is in need of innovative solutions to turn its fortunes around. Offering free ads is an ambitious move by Musk, but it remains to be seen whether the strategy will pay off for Twitter. The platform must carefully consider if offering free ads is worth the potential risk before moving forward. Only then can Twitter make a determination about whether or not this strategy is a good one.
Time will tell if Musk’s plan works, but either way it looks as though Twitter is in store for an interesting few months ahead.