WSJ Obtains Email Sent by Twitter to Advertisers
"No Official Account Verification Without Minimum Advertising" Pressure Also Reported
Elon Musk is reportedly working hard to secure advertisers by offering discounts on advertising rates immediately after changing Twitter's iconic logo from the "blue bird" to the letter "X," the Wall Street Journal (WSJ) reported on the 25th (local time).
WSJ said it obtained emails that Twitter sent to advertisers in the United States and the United Kingdom, reporting this development.
According to the report, Twitter proposed to advertisers that if they sign new contracts for certain video ads by the end of this month, they would receive a 50% discount on advertising rates. Twitter explained, "The goal of this discount is to make it easier for advertisers to access advertising during important times for Twitter, such as the Women's World Cup."
At the same time, Twitter declared that starting from the 7th of next month and for one month, advertisers who do not place at least $1,000 (approximately 1.28 million KRW) in ads or who have not spent more than $6,000 on Twitter ads in the past 180 days will not receive an official verification badge on their brand accounts.
WSJ noted, "Official verification on social media is an important issue for many companies," adding, "This is because, as some Twitter users did early after Musk, Twitter's chairman and chief technology officer (CTO), acquired the platform, there were issues with fake accounts impersonating certain brands and acting as if they were official accounts." For example, there was controversy when an account pretending to be the American pharmaceutical company Eli Lilly posted about distributing insulin for free.
Twitter's recent decision coincided with the timing of Musk changing Twitter's logo. The day before, Musk changed Twitter's logo from the blue bird to the letter X and effectively declared a transition to a "super application (app)."
Since acquiring Twitter last October, Musk has focused on improving profitability. To this end, he introduced the account verification service "Twitter Blue" and implemented measures such as limiting search volume and post views. He argued that the problem was that most services were provided for free, so he introduced various restrictions on the SNS and encouraged users to use paid services.
However, Twitter generates 90% of its total revenue from advertising. Without a recovery in advertising revenue, it is difficult to improve Twitter's profitability. In this context, Twitter's recent move to discount advertising rates while emphasizing a minimum advertising threshold for official verification badges is interpreted as a kind of "carrot and stick" approach introduced by Musk to increase profitability.
Musk's Twitter has previously used advertising rate discount strategies as a way to attract advertisers. Earlier this year, ahead of the Super Bowl, the largest sports event in the United States, Twitter offered benefits related to advertising, such as providing free ads to advertisers who placed ads above a certain amount on Twitter.
Despite these efforts, Twitter has not been able to avoid a sharp decline in advertising revenue since Musk's acquisition. This is believed to be due to changes in the nature of content posted on Twitter and the shift to paid services, which reduced ad exposure and thus negatively impacted advertisers.
Musk recently revealed that Twitter's advertising revenue has dropped by up to 50% since the acquisition and that cash flow is currently in the "negative (-)" territory. Industry insiders estimate that Twitter's brand value has also plummeted by more than 30% due to the sharp decline in advertising revenue. Musk has stated that he plans to turn cash flow into "positive (+)" soon.
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