Many Nigerian content creators with verified accounts on X (former Twitter) are currently singing the praises of Elon Musk after receiving payment alerts from the new ad sharing policy of the company. The payments which range from $251 to $500 and are paid to Nigerian creators with a Stripe account are part of a strategy by Musk to boost subscriptions to X Premium as well as attract more content and advertisers to the platform.
X’s ad traffic tanked by 20.6 percent in June 2023 compared to a year ago, data from Similarweb showed. Overall traffic on the platform has been on a steady decline since January. It declined by 5.8 percent in June. The platform has also seen engagement on Twitter’s app which also dropped within the same period, from roughly 88 million users to 83 million, or 5.5 percent.
In July, Musk said X has lost almost 50 percent of its advertising revenue since he acquired the company in October 2022. The expected increase in sales the company anticipated in June 2023 also did not materialise. Apart from decline in traffic and ad revenue, X is also facing heavy debt. Musk reportedly had to pay $13 billion in July.
The company’s current revenue profile has also eroded its valuation in the market. According to Fidelity, an asset manager, X is estimated to be worth just $15 billion in May which is a far cry from the $44 billion Musk paid to acquire the company.
Experts say Musk takeover and his approach to running the company are largely responsible for the decline in X fortunes. Sultan Akintunde, co-founder of AltSchool Africa, noted that advertisers started pulling out and companies had issues with certain terms Musk created. Also the billionaire is seen to have failed in fixing the bot accounts he made so much noise about prior to acquisition of the platform.
According to Akintunde, in fixing the problem Musk made two mistakes, one of which was assuming that everyone on the platform will be willing to pay a monthly subscription.
“The goal of this was the bump of Monthly Recurring Revenue (MRR),” said Akintunde. “It sounded easy to think. Twitter had 250M+ daily active users but only 0.2 percent ended up paid for Twitter Blue (now X Premium). I’m guessing he expected around 10 percent to pay. That was a flop.”
Musk also assumed that verified celebrities will want to keep their verification by paying a small verification, says Akintunde. However, there was an early stigma around paying for a verification with many users debating whether paying for it does not devalue the whole idea of being verified because of the celebrity status without needing to pay for it. Musk tried to rectify the mistake by offering the X Premium for free to a few celebrities and influencers.
“One last mistake he didn’t see coming was also assuming all companies will gladly pay for the gold checkmark at $1000/month. That flopped also,” he said.
Musk has since tried to boost advertising revenue by devising creative ways to shore up impressions. One of these is to place ads in the comment section which enables it to increase impressions. X’s ads revenue comes mostly from individuals and companies that pay X for their tweets to be promoted and shown to an audience.
“When you make a regular tweet, those ads are shown in the replies of your tweet. The more engagement your post has, the more replies it gets and the more ads can fit into the replies,” said Joshua Oghenekaro Okwe, a product designer at Toptal. “So basically, Twitter makes more money from advertisers because of your tweet. Therefore, they can share some of that money you generated with you.”
Akintunde makes the point that the ad sharing policy will ensure that creators do not need to direct their followers to platforms like YouTube or Instagram where they posted a video to watch it. They can simply post the video on Twitter and if it is able to generate as much as 5 million impressions, they will be receiving an alert from Twitter.
“Instead of just using my Twitter to direct traffic to YouTube so people can watch your videos and you make money from YouTube, how about you just post that video here and I’ll also pay you more than what YouTube is paying you,? Akintude said.