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Twitter to relax restraints on political ads to generate more revenue

Twitter started 2023 with an announcement it would relax restrictions on political advertising, thus indirectly admitting its need to generate more revenue in the new year.

“We believe that cause-based advertising can facilitate public conversation around important topics. Today, we're relaxing our ads policy for cause-based ads in the US. We also plan to expand the political advertising we permit in the coming weeks,” the Twitter Safety account posted on Wednesday.

“Moving forward, we will align our advertising policy with that of TV and other media outlets. As with all policy changes, we will first ensure that our approach to reviewing and approving content protects people on Twitter. We'll share more details as this work progresses.”

Cause-based ads call people to take action and also educate and create awareness among people with respect to “civic engagement, economic growth, environmental stewardship and social-equity causes,” Twitter’s advertising policy page says.

Twitter banned political advertising in 2019 after its then Chief Executive, Jack Dorsey, declared that reaching people with political messages should be “earned, not bought.”

“This isn’t about free expression. This is about paying for reach. And paying to increase the reach of political speech has significant ramifications that today’s democratic infrastructure may not be prepared to handle,” Dorsey said after announcing the ban.

The company is now committing to a reversal of that policy as political advertising is a useful way to earn more revenue – which is lacking because commercial advertisers have paused spending on Twitter after Elon Musk bought the company for $44 billion late last year.

Numbers are alarming. Statistics from research firm Pathmatics, recently published in the Wall Street Journal, showed that roughly 70% of Twitter’s top 100 advertisers were still not spending on Twitter in mid-December.

This means that Musk and his team, who have been holding meetings with major advertisers, have not been able to convince them to come back.

It’s a problem since around 90% of Twitter’s $5.1 billion in revenue last year came from ads. Besides, the company has posted a loss in eight years of the past decade and hasn’t booked an annual profit since 2019.

However, large companies are worried about a wave of fake corporate accounts triggered by a botched relaunch of the Twitter Blue subscription service. Advertisers are also concerned with Musk’s chaotic behavior online and his decision-making process.

Twitter’s ban on political ads was at odds with policies at Facebook and other social media companies – they allow governments, elected officials, and candidates to purchase ads.

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