In a recent announcement, Twitter’s owner Elon Musk revealed that the social networking site will start paying its verified content creators for ads served in their replies. Musk has set a block payment of $5 million for the first round of payments, with additional details to follow soon. However, there are conditions attached to this new payment system. Content creators must be verified, and only ads served to verified users will count.
This move by Musk is expected to provide advertisers with another potential stream of revenue on Twitter. It comes at a crucial time for the platform, as Linda Yaccarino is set to join as the new CEO. The hope is that her leadership will restore trust in the platform after ad revenue took a significant hit following Musk’s restructuring decisions. The layoffs of almost half of Twitter’s workforce and the implementation of paid blue tick verification for public figures resulted in a drop in ad spend, down approximately 20% year on year.
Musk has been vocal about his optimistic outlook for Twitter’s ad sales, despite the recent challenges. He aims to increase the platform’s current rate of 5 to 6 cents per hour of user attention to 15 cents or more. This will be achieved through the delivery of more relevant and timely ads.
The timeline of events leading up to this announcement sheds light on Twitter’s recent struggles. In October 2022, Musk acquired the platform for around $44 billion after months of negotiations. Shortly after, several top executives were laid off, including the CEO, CFO, chief legal officer, and general counsel. This was followed by a mass layoff of almost half of Twitter’s global staff.
In November 2022, Twitter made its blue tick verification system a paid service, resulting in many public figures losing their verification badges overnight. This led to a surge in fake profiles impersonating these figures. The frequency of posts on the platform also decreased by 20% in February 2023.
Further setbacks came in April 2023 when Twitter was dropped from Microsoft’s Ad platform and Musk enforced mandatory verification on advertisers. This was followed by a significant drop in Twitter’s US ad revenue by 59% in June 2023.
The move to pay verified content creators for ads served in their replies is seen as a step towards addressing these challenges and boosting ad revenue on the platform. Advertisers will now have another avenue to reach their target audience and generate revenue. With Yaccarino’s appointment as CEO, there is hope that Twitter can regain trust and stability in the ad market.
Overall, Musk’s announcement regarding payment for ads served in replies highlights Twitter’s efforts to revive its ad revenue and maintain its position as a key player in the social media landscape.