Since taking over Twitter Inc., Elon Musk has rapidly made big changes, laying off employees, tweaking posting rules and suspending and reinstating accounts.
There’s one group he has struggled to manage, one that’s vital to the company’s future: advertisers.
About 70% of Twitter’s top 100 ad spenders from before Mr. Musk’s takeover weren’t spending on the platform as of the week ending Dec. 18, according to an analysis of data from research firm Pathmatics. It’s a problem the billionaire can’t afford to ignore, since roughly 89% of Twitter’s $5.1 billion in revenue last year came from ads.
In meetings with advertisers in recent weeks, Mr. Musk’s lieutenants have tried to calm fears and drum up interest in the site. They’ve promised innovations such as ads that allow users to make purchases directly, more video capabilities and tools to keep ads from appearing near objectionable content, according to ad executives familiar with the meetings.
Some ad buyers said they will need to see changes at Twitter before they feel comfortable returning. Advertisers say they are concerned about Mr. Musk’s moves as owner and CEO, including his abrupt rule-making and controversial tweets. Just as it can be hard to separate the art from the artist, many advertisers are struggling to separate Twitter from Mr. Musk.
“He has made it so that advertisers can’t avoid the association. He created that vulnerability and he continues to double down on it,” said Irwin Gotlieb, a former chief executive of ad-buying giant GroupM.
Twitter and Mr. Musk didn’t respond to requests for comment.
Mr. Musk has said he plans to step down as Twitter CEO based on the results of a Twitter poll he launched last weekend. That raises the prospect he could put some distance between himself and the company, though a new CEO would report to him as the owner.
Speaking Tuesday on Twitter Spaces, the platform’s live-audio service, Mr. Musk said advertisers have told him they want a healthy return on investment. “Their requests are not fuzzy or irrational or anything. They’re like, quite reasonable,” he said, adding that when economic times are tough, advertisers ask hard questions.
Mr. Musk and his lieutenants have a lot of ground to make up on Madison Avenue. The list of advertising defectors includes United Airlines Holdings Inc., General Mills Inc., General Motors Co., and Pfizer Inc. Several large ad agencies said the majority of their clients have halted spending.
Mr. Musk says he wants to lower Twitter’s reliance on ad dollars and build a robust subscription business around an $8-a-month paid verification plan, or $11 a month for those who subscribe from an Apple Inc. mobile device. Meanwhile, he and his team haven’t given up on bringing advertisers back.
Twitter sales executives alerted some marketers on Dec. 14 that Mr. Musk would soon be calling the chief executives of top advertisers that have paused their ad spending, according to an email reviewed by The Wall Street Journal. Mr. Musk, the email said, “wants to ask what Twitter can do to be helpful.”
Publicly, Mr. Musk has sometimes taken a combative tone with advertisers, at one point threatening to “thermonuclear name & shame” advertisers who had left.