Top ad guru Martin Sorrell downplays chances of Trump’s Truth Social capturing serious market share

Advertising
guru
Martin
Sorrell
has
questioned
the
prospects
of
Donald
Trump’s
newly
public
Truth
Social
platform,
saying
it
was
currently “unfathomable”
that
clients
would
want
to
buy
ads
on
the
site.

The
British
businessman
told
CNBC
on
Wednesday
that
the
former
U.S.
president’s
social
media
platform
has
yet
to
prove
its
financial
viability
in
an
already
challenging
advertising
market.

“It’s
a
bit
unfathomable.
What
are
the
revenues
there?”
Sorrell,
founder
and
executive
chairman
of
digital
marketing
firm
S4
Capital,
said
when
asked
if
clients
were
likely
to
advertise.

Trump
Media
&
Technology
Group
(TMTG),
the
company
behind
Truth
Social,
went
public
Tuesday
after
merging
with
shell
company
Digital
World
Acquisition
in
a
deal
known
as
a
special
purpose
acquisition
(SPAC).

Shares
jumped
more
than
50%
during
a
volatile
first
day
of
trade,
before
ending
the
session
up
16%,
giving
the
company
a
market
cap
of
around
$7.85
billion,

according
to
the
Associated
Press.

The
listing
pocketed
the
presumptive
Republican
presidential
candidate
a
paper
fortune
of
over
$4
billion
for
his
58%
share
of
the
company
at
a
time
when
he
faces
mounting
legal
challenges.
He
was
on
the
hook
for
a
$454
million
bond
in
a
civil
fraud
case,
but
the
fee
was

reduced
to
$175
million
Monday
following
an
appeal.

The
fanfare
comes
even
as
the
company
has
struggled
to
demonstrate
a
path
to
profitability.

“It
sort
of
defies
reality,
at
least
at
the
beginning,”
said
Sorrell
said,
who
is
also
the
founder
and
former
CEO
of
ad
agency


WPP.

A
spokesperson
for
TMTG
firmly
dismissed
claims
that
the
share
price
move
defied
logic
when
contacted
by
CNBC.

Truth
Social
lost
$10.6
million
in
the
first
nine
months
of
2023
on

revenues
of
$3.4
million.
According
to
Semafor,
the
company
has
now
lost
at
least

$57
million
since
its
inception
in
2021,
when
it
was
created
by
Trump
in
defiance
to
his
blacklisting
from
Twitter
following
the
Jan.
6
Capitol
attack.

It
has
also
said
that
it
may
never
disclose

key
performance
data,
such
as
sign-ups,
ad
impressions
and
average
revenue
per
user
—
metrics
critical
for
advertisers
to
assess
potential
market
opportunity.

That
could
make
the
sell
even
more
challenging
as
major
social
platforms
vie
for
a
share
of
ad
spend
in
a
still
challenging
economic
environment,
Sorrell
said.

The
ad
exec
on
Wednesday
warned
that
budgets
were
likely
to
remain
constrained
in
2024
after
reporting
a
fall
in
S4
Capital
revenues
for
2023.

“The
social
platforms,
from
an
advertising
point
of
view,
are
not
big
advertising
features,”
he
said.

Citing
Alphabet,
Meta
and
Amazon
as
the
three
major
ad
platforms
in
the
West,
and
Alibaba,
Tencent
and
Bytedance
as
the
big
players
in
the
East,
Sorrell
said
it
could
be
difficult
for
other
names
to
take
market
share.
Even
Twitter
under
its
new
X
branding
and
management
has
seen
ad
revenues
halve.

“TikTok
is
the
only
one
that
has
really
broken
through,”
Sorrel
said,
estimating
that
TikTok
accounted
for
around
one-fifth
of
owner
Bytedance’s
around
$90
billion
2023
ad
revenue.
TikTok
is
now
facing
a

potential
ban
in
the
U.S.
amid
national
security
concerns.

Still,
Sorrell
caveated
his
comments
by
saying
that
Trump
could
prove
a
formidable
competitor,
both
in
business
and
politics.

“You
can
never
count
President
Trump
out
—
either
electorally
or
in
terms
of
social
platforms,”
he
said.