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Twitch ‘Adpocalypse’ Why Streamers Are Losing Massive Ad Revenue

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Twitch ‘Adpocalypse’: Why Streamers Are Losing Massive Ad Revenue

Twitch streamers are reporting significant drops in advertising revenue, with some creators seeing declines of up to 95% in November 2024, according to high-profile broadcasters and industry experts.

“Streamers are making a lot less money this month,” content creator Mogul Mail said in a recent YouTube video. “For some people, it’s half; for others, they’re making 10-20% of what they used to make.”

Describing Twitch’s advertising evolution, Mogul Mail noted that “back in the day, running ads was cringe” and added that people were already paying subscribers for content. According to him, this changed when Twitch began actively promoting ad revenue opportunities to creators, including subsidized programs that guaranteed payment for running specific amounts of advertising per hour.

Mogul Mail cites recently leaked revenue data from FaZe Clan members to illustrate the scale of potential advertising earnings: one creator earned $1.2 million during a subathon despite having only 63,000 subscribers. “If you do the math, that 63,000 subscribers is $220,000, which means he made an extra million that’s not from bits—that would mostly be from ads,” he noted.

The current advertising crisis on Twitch began in October 2024, following revelations about the platform’s year-long restriction of new users from Israel after October 7, 2023. Democratic Rep. Ritchie Torres criticized Twitch CEO Dan Clancy over content moderation concerns, particularly regarding political streams. 

Devin Nash, creator and CMO of Novo advertising agency believes the controversy prompted major advertisers to pull their spending from the Amazon-owned streaming platform. In a YouTube video, he reported that streamers who previously earned $10,000 daily from advertisements are generating approximately $2,000.

Nash explained that Twitch’s advertising challenges stem from its position in brands’ marketing strategies. “Twitch advertising typically comes from experimental budgets rather than main marketing allocations,” he stated. “For major brands like Ford, Twitch might represent $150,000 of a $400 million marketing budget, making it an easy line item to cut when concerns arise.”

In his video, Nash identified several structural challenges facing Twitch:

  1. Live Format Limitations: Unlike YouTube’s video-on-demand model, Twitch’s live streaming format makes content moderation more challenging.
  2. Discovery System: Twitch’s “kingmaker” system, which promotes high-viewership streams regardless of content category, makes segregating controversial content from advertiser-friendly programming difficult.
  3. Demographic Challenges: The platform’s younger audience demographic and lower conversion rates make it less attractive to non-gaming advertisers.

In response to the advertiser exodus, Twitch implemented new content labels for political and sensitive content, allowing advertisers to opt out of specific categories, and updated its content policies.

Mogul Mail believes the situation mirrors YouTube’s 2017 “adpocalypse,” when advertising revenues fell by 70-80% before stabilizing at approximately 30% below previous levels after several months. “The ad money is going to come back, maybe not to where it was before, at least not for a while, but we know this because this has happened before,” he predicts.

The YouTuber also claims creators are increasingly adopting multi-platform streaming strategies in response to the uncertainty, adding that YouTube generates an average return on advertising spend of 2.6 to 1.

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Dragomir is a Serbian freelance blog writer and translator. He is passionate about covering insightful stories and exploring topics such as influencer marketing, the creator economy, technology, business, and cyber fraud.

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