Twitter is allegedly adopting a firm approach with advertisers to improve its financial performance as it undergoes its rebranding to X. As part of its current strategy to boost revenue, the company is implementing measures to attract higher earnings.
(Photo : STEFANI REYNOLDS/AFP via Getty Images)
This illustration photo created in Washington, DC, on July 24, 2023, shows the new X Twitter logo reflected in the bird Twitter logo.
Requiring $1,000 Monthly Ad Spend
Formerly known as Twitter, X is taking a tough stance with advertisers as part of its effort to improve its financial performance. Engadget reported that their latest revenue-increasing strategy involves requesting brands to allocate a minimum of $1,000 per month on advertisements to retain their verified status on the platform.
Elon Musk, who is presumably discussing this approach, describes the cost as "moderately high" and believes it will act as a deterrent to prevent numerous scammers from creating millions of accounts on the platform. Alternatively, brands have the option to pay the same amount per month for the company's verified organization badge.
The company is actively exploring strategies to mitigate its losses, with advertising being its primary revenue stream. As part of this effort, the company is implementing significant price cuts on certain advertising slots. Notably, all new bookings made until July 31st will receive a generous 50 percent discount.
Starting from August 7, X has informed advertisers that their accounts will lose their verification (indicated by a gold check mark) if they fail to meet certain spending thresholds on ads. Specifically, brands must have spent at least $1,000 on ads within the previous 30 days or a total of $6,000 on ads within the past 180 days, as stated in the email.
Verification holds significant importance for many companies on the social media platform due to concerns about potential impersonation and misrepresentation by bad actors. This concern was heightened during the initial weeks of Musk's ownership, as there were instances where Twitter users posed as certain brands, leading to deceptive practices.
Drawing New Ad Commitments Under Musk's Ownership
Under Musk's ownership, the company, primarily reliant on advertising revenue, has encountered difficulties in attracting new ad commitments. As per a report from Slate, this is partly due to brands' apprehensions about Musk's management style and content moderation approach.
Moreover, the advertising industry as a whole is facing a downturn, leading numerous media companies to provide discounts to entice brands. X justifies these discounts by stating that they enable advertisers to extend their reach during critical moments, like sporting events, ensuring better engagement with their target audience.
X just introduced a special promotion for advertisers earlier this week, providing reduced pricing on video ads that appear alongside the list of trending topics in X's "Explore" tab. These ads offer brands prime visibility, securing a 24-hour placement at the top of the site's trending topics list.
According to emails obtained by the Wall Street Journal, the rationale behind these discounts is to assist advertisers in reaching a wider audience during critical moments on Twitter, such as during events like the Women's World Cup.
Related Article: Twitter Loses $2 Billion in Ad Funding as Top Advertisers Flee Platform: Study
