Elon Musk’s tumultuous reign at Twitter has resulted in relationships with top brands and advertisers being severely fractured. As a result, the social media company’s $5 billion-a-year advertising business has been hit by strained content and resource censorship.
Many top advertising agencies and ad buyers have told the Financial Times that nearly all of the major brands they represent have halted spending on Twitter. The reason given is because of the alarming things about Musk’s distinctive approach to content control and the decision to eliminate many of the company’s advertising sales teams.
Not stopping there, according to some sources, Musk has even personally called the executives of some brands that have restricted advertising to “scourge” them. This led some units to decide to reduce their spending to the minimum necessary to avoid further confrontation with the billionaire businessman.
According to the Financial Times, after many job cuts and some self-employment, Twitter’s advertising business team has shrunk to the point that many agents no longer have any contacts at the company. company and received little or no contact in recent weeks.
An advertising agency said some brands were unable to receive feedback on the effectiveness of previous campaigns due to staff shortages. Others are complaining that Twitter’s advertising system is also buggy, making it difficult or even impossible to run campaigns.
“Quite strange. The anarchy, the damage, had never happened of this magnitude before. Never,” said senior executives of four major advertising agencies.
Musk is under pressure to increase revenue for Twitter, as he faces annual interest payments of up to $1 billion after burdening the company with $13 billion in debt due to funding the acquisition.
On October 27, the day he closed a $44 billion deal to buy Twitter, the Tesla and SpaceX chief executive sought to reassure marketers that the platform wouldn’t become “free hell.” fee for all” although he plans to relax content moderation restrictions.
Soon after, Musk conducted multiple calls and meetings to reassure leading advertising agencies and brands. One email, sent in early November, said of Musk: “He’s one of the greatest innovators in the world, and he understands our platform and products to a degree that few people understand. He wants to deliver interesting stuff and he wants to do it quickly.”
During the meetings, Musk laid out all the details of how the platform works, the two directors, impressing brands with his in-depth knowledge. “He knows more than former CEO Jack Dorsey. He’s dug a lot into this business,” said a senior executive at a top advertising agency.
However, this relationship quickly deteriorated after Musk laid off more than half of the company’s 7,500 workforce, changed Twitter’s ad sales, safety and trust teams, and raised concerns that misinformation and hate speech could proliferate on the platform.
Corporations such as General Motors, Volkswagen, Carlsberg and General Mills have announced that they will pause spending on the platform due to censorship concerns.
Many in the advertising industry have struggled to keep up with the changes. Robin Wheeler, who began leading Twitter’s ad business under Musk after former chief Sarah Personette stepped down, left the company last week. Bloomberg reported that Wheeler was fired by Musk after refusing to fire more people on the ad sales team.
Musk’s own use of Twitter – which includes reposting conspiracy theories and interacting with controversial accounts – has also spooked brands for fear of their content being placed next to malicious posts.
Musk further annoyed advertisers when he relaunched Twitter’s premium subscription service, Twitter Blue. The company’s “green tick” feature was then abused by impostors, targeting politicians and brands like Eli Lilly and Lockheed Martin. However, Musk was quick to pause the service’s rollout until there was “high confidence about stopping impersonation.” By Friday, he said he would aim to launch the service next Friday.
Last week, Musk also began reversing some of the permanent bans on famous figures, such as former US president Donald Trump.
But the change also has an impact on Twitter’s ad technology. Gabby Krite, Head of Digital Operations at The Kite Factory, which used to spend “hundreds of thousands” of dollars a year on the platform, said she was experiencing technical difficulties placing or changing ad campaigns. fox. “Having technical issues with campaign management…meaning it is completely unreliable as a platform to use,” she said.
Media Matters analysis shows that 50 of the top 100 advertisers – accounting for $750 million in ad dollars by 2022 – have paused or announced their intention to pause spending since Musk took the helm. . Another 7 advertisers have reduced their spend to a trickle. Those 50 advertisers account for $317 million of Twitter’s $5 billion revenue in 2021, Media Matters said.
In mid-November, Omnicom Media Group recommended that customers pause spending on the platform, following a similar recommendation from Interpublic. Last week, WPP’s GroupM raised their assessment of advertising risk on Twitter to “high risk”.
It’s unclear if the brands will return and when. “It’s hard to get back to the platform when Musk manages to tweet and something changes on the platform on a daily basis that worries advertisers,” said an executive at an advertising agency. other said.
“Musk’s best chance to bring advertisers back to Twitter is to appoint a new CEO,” said Darren Savage, chief strategy officer at Tribal Worldwide. In particular, someone who understands what Twitter is, has credibility with advertisers and users and is then left alone to do their job.”
Source: Financial Times