So, it’s been roughly a month since Threads opened, set to rival Twitter’s dwindling platform as endless changes and restrictions infuriate users. As expected, the initial signup surge of 100 million in the first week has dipped and active daily use has dropped from a peak of 49 million on 7 July to 12 million on 22 July. Overall, despite breaking records with its initial signup numbers, usership of Threads is less than half of Twitter’s even on its busiest day. 

However, this doesn’t mean that Twitter is necessarily thriving in the face of Threads’ growth. As ad revenue plunges by 50 percent and the platforms average 100 million daily users once again bemoan Musk’s changes—including tweet limits, DM limits, and an ugly rebrand—Twitter’s future hangs in the balance. 

Let’s delve into the root causes of the Twitter decline, focusing on the impact of Musk’s decisions on the platform’s financial health and user experience. 

The soaring drop in ad revenue

Elon Musk recently revealed that Twitter is experiencing a staggering 50 percent decline in advertising revenue. The unexpected slump has added to the company’s financial woes, raising concerns about its ability to achieve positive cash flow in the near future. With a considerable portion of its revenue reliant on ad sales, and a very low-level take-up of Twitter’s monthly subscription service, this sharp drop represents a severe blow to Twitter’s stability and sustainability. 

During a crucial five-week period between April and May, Twitter missed out on approximately $200 million in ad revenue. Musk’s tweet about the anticipated increase in ad revenue for June, which failed to materialise, further compounded the company’s financial challenges. Although Musk remains optimistic about the prospects in July, the missed opportunities cast a shadow over Twitter’s immediate future.

The failure of cost-cutting measures

Since taking over Twitter in October 2022, Elon Musk has implemented aggressive cost-cutting measures, including substantial employee layoffs and reductions in non-debt expenditures. Despite these efforts, Twitter’s financial struggles persist, indicating that these measures alone may not be enough to drive the platform toward positive cash flow. 

Musk’s recent decision to impose limits on the number of tweets users could view raised concerns about the user experience on the platform. Unverified users were, for a short time, restricted to reading a limited number of posts per day. Tweets also weren’t viewable if you weren’t logged in, which had a huge impact on access to the site. Millions of news articles and websites feature embedded tweets from prominent figures and news sources. This feature not only bolstered the credibility of the articles but also served as free advertising for the platform. It reminded users that Twitter was the hub of important discussions and breaking news. 

However, Musk’s decision to limit the visibility of tweets by blocking non-logged-in users and imposing a cap on post views undermined this foundational strength. All of these mistakes lead to a plunge in the brand’s reputability, potentially leading to a decline in user engagement and loyalty. By pushing users to seek alternative apps, Musk may inadvertently be harming the core value proposition that attracted users and advertisers to Twitter in the first place.

What does this mean for Twitter?

The Twitter decline under Elon Musk’s ownership is evident through the significant drop in ad revenue and the rise of significant competitors, capitalising off the anger and frustration of users that their experience is compromised by restrictive measures. 

However, Musk’s Twitter has lasted longer than many believed, with it coming up to a year of his ownership in October. Despite everything, the platform still retains a strong and active user base—just one that likes to complain about the changes being made to the site. All in all, though the platform has seen more decline in the last year than it has in its whole 17-year lifespan prior, its future is still uncertain. The platform isn’t yet a write-off, nor is it the new ‘X’ Musk wants it to be. 

To regain its former glory, Twitter must strategise to address its user satisfaction issue, either by giving people back the user experience they’re used to or improving on it to make it something better. This lies at the core of calling back advertisers and rebuilding the brand’s image. Musk doesn’t show any sign of slowing down his changes any time soon, but maybe that’s why he needs to take the advice of expert brand strategists, before he loses what’s left of Twitter’s credibility.

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Katie Sessions Account Executive
At Faith, Katie is responsible for helping to manage client accounts and deliver communications plans, alongside continuing to craft compelling stories that resonate with audiences.