• by Laurie Sullivan  @lauriesullivan, April 11, 2023

Twitter’s advertising business and time spent on site by users continues to decline.

Poor performance has prompted analysts to reduce the company’s revenue forecast for a second time since Elon Musk first offered to buy the company in April 2022.

Jasmine Enberg, principal analyst at Insider Intelligence, believes none of Twitter’s efforts to bring back major advertisers -- including ad incentives and brand safety partnerships -- will work with Elon Musk at the helm.

The analyst firm forecasts Twitter’s global ad revenue to fall 27.9%, from $4.14 billion in 2022 to $2.98 billion by the end of 2023.  Its share of the global digital ad market will shrink from 0.8% to 0.5%. For comparison, our Q3 2022 forecast projected 2023 revenues at $4.74 billion.

In Q3 2022, Insider Intelligence decreased its outlook for Twitter’s advertising business by 30%, compared with the prior forecast.

In the UK, Twitter’s ad revenue will fall from £282.1 ($347.6) million in 2022 to £202.2 ($249.1) million by the end of this year, down 28.3%.

Insider Intelligence in December 2022 projected Twitter would lose users for the first time since the analyst firm began tracking the metric in 2008. Its worldwide user base is anticipated to decline by 3.9%, with another 5.1% next year.  That’s a loss of 32.7 million users in just two years.  

In the U.S., Twitter’s core user base — people ages 18 to 44 — won’t change. The steepest declines in the U.S. will be seen among users ages 45 and older and 17 and under. Many are “marginal users,” and some started using the platform only last year to watch the acquisition drama unfold, according to Insider Intelligence.

Political preferences also play a role in users’ decision to leave or stay.

Insider Intelligence also forecast that time spent on Twitter among U.S. users will decline by two minutes in 2023, and another two minutes in 2024. Less time on the website by users means they see and have the ability to engage with fewer ads.

“That’s partly due to the proliferation of hateful content and technical issues on the platform under Musk, but it’s also because of longstanding challenges,” according to the analyst. “Twitter lags in social video — which is the single biggest driver of time spent on social media.”