Advertisers See Elon Musk As A Liability As They Avoid Twitter

Failures

from the you've-done-everything-wrong dept

Elon Musk keeps talking about how he’s saving Twitter, but it’s difficult to see how. He’s made the site much more unstable, has been messing up basically every part of “trust & safety 101,” is now facing a growing number of lawsuits (including many over unpaid bills), has no idea how the site actually works, and has regulators breathing down his neck. And, on the business side, well, it’s not going great. His grand solution to saving Twitter — charging for Twitter Blue — has been a flop, and each new “update” makes him more of a laughingstock. Rather than increasing the value of using Twitter, he’s made it worse by shutting down, or charging ridiculous fees for, API access.

Twitter’s revenue was almost entirely from advertising, which brought in nearly $5 billion. Now, there’s a reasonable argument to make that it would be good for Twitter to diversify revenue streams, and figure out ways to find alternatives that don’t rely on ads. To date, however, Musk’s big idea has flopped, and rather than just cutting a few costs on the margins, and using the constant stream of ad revenue to finance his experiments into other business models, Musk took the Leeroy Jenkins approach of rushing in with no idea and no plan.

It’s not going great.

We already know that advertisers quickly fled as they worried about the direction of the site. The company desperately tried to cling to fleeing advertisers by offering them hundreds of thousands of dollars of free advertising. But advertisers said that it just wasn’t worth it. Musk himself admitted that he drove away nearly half of all advertisers, and possibly way more. If my own (increasingly infrequent) visits to the site are any indication, Musk has now turned up the advertising dial so that my feed is now full of ads every few tweets, which (again!) makes the site less useful and less interesting. And the ads in my feed are so, so bad. The company is clearly scraping the bottom of the barrel.

Advertisers are now speaking about it and they have a simple message: The problem is Elon Musk. Twitter was basically just fine as an ad platform. Not great, could be better, but it was okay. But the real issue now is just that anyone with any sense at all is freaked out about how Elon Musk himself is going to destroy their brand value.

One of the biggest barriers to spending more, advertisers say, is Musk’s own behavior on Twitter. In the past month alone, Musk defended the cartoonist who created “Dilbert” after he went on a racist tirade and made a sexist joke about women being “dangerous and violent.” This week, he responded to — and thereby amplified — a tweet that promoted an anti-trans narrative around the school shooting in Nashville, Tennessee.

Advertisers have expressed concern about Musk’s erratic decision making and how his personal brand blurs with Twitter’s corporate image. For instance, the same weekend as the Super Bowl — traditionally a major advertising event for Twitter — Musk was asking engineers to adjust the algorithm to boost his own tweets into users’ feeds.

“It’s this intangible wild card,” the media buyer said about Musk, asking for anonymity to preserve relationships at Twitter. “We need to work with clients to understand from a values perspective: Is this a partner you want to be in business with?” The short answer for many advertisers right now is no.

Elon Musk is literally a liability for his own site.

Hilariously, Twitter introduced a tool to try to deal with some of this, letting advertisers make sure their ads don’t appear next to certain accounts… and advertisers are using it to make sure their brand is nowhere near Musk.

Author Exclusions, as Twitter calls them, let advertisers choose as many as 1,000 handles that they want their ads kept away from, in addition to keywords and topics. “Brands need to consider the source and what a person stands for,” said Jason Lee, brand safety officer at Horizon Media, a leading US media agency. 

“The irony, of course,” said another media buyer from a large agency, is “the No. 1 or No. 2 account that we’re going to look to avoid is the owner of the company.”

Then in a separate article over at Semafor, we find out that advertisers are having private discussions of “how do you deal with Elon Musk” and the whole thing is just bizarre.

But a private email thread among the organization’s board members, obtained by Semafor, suggests he will face a skeptical audience. Top advertisers, including McDonald’s and Colgate-Palmolive, are concerned that Musk’s comments about race and the platform’s openness to racist speech have rendered Twitter toxic.

“For many communities, his willingness to leverage success and personal financial resources to further an agenda under the guise of freedom of speech is perpetuating racism resulting [in] direct threats to their communities and a potential for brand safety compromise we should all be concerned about,” wrote McDonald’s chief marketing and customer experience officer, Tariq Hassan.  “Further, all of us who lead our brand’s investments across platforms were required to navigate a situation post-acquisition that objectively can only be characterized as ranging from chaos to moments of irresponsibility.”

Again, Twitter had problems. You could easily see a variety of paths by which the site and its sustainability could have been improved. There was bloat that could easily have been trimmed. There were products and offerings that could have been more compelling and there were business model ideas that could stand to be improved. But, to do all that, it would help to continue (and continue to grow) what had been a $5 billion / year fire hose, and instead, Musk has literally driven much of that away almost entirely because he’s erratic and prone to nonsense.

It’s really an incredible, somewhat historic, self-own.

Filed Under: advertising, elon musk
Companies: twitter