A professor who studies social media platforms was interviewed on NPR yesterday. He was no fan of Elon Musk or of Twitter and predicted that Twitter was probably destined for the garbage dump of history anyway and that Musk would great accelerate that. He named half a dozen platforms that are much more powerful than Twitter, from Facebook and TikTok to WhatsApp and Instagram. Twitter is the 15th largest platform, and has been failing with advertisers, shrinking (in terms of monthly average users) and practically a non-factor outside of North America. The professor noted that Musk doesn’t know anything about the business he just stumbled into and, worse, that he is a terrible businessman. The richest man in the world is a terrible businessman; he didn’t elucidate. But, as Trump said, Musk has had a lot of help from the government. Since 2012 Jeff Bezos’ net worth went from $18 billion to $134 billion and Warren Buffett’s has gone from $44 billion to $101 billion. But Musk’s? From a mere $2 billion to an astronomical $221 billion.
Yesterday, Musk’s forced purchase of Twitter went through, he showed up at San Francisco headquarters and started firing people immediately. He has said “he wants to make the social media platform a more freewheeling place for all types of commentary and that he would ‘reverse the permanent ban’ of Trump from the service… The acquisition has been celebrated by some Republicans, who have argued that Twitter censored conservative viewpoints. Researchers have said Twitter’s rules have been essential to countering online hate speech and disinformation. Some advertisers have worried about allowing their brands to appear alongside controversial tweets.”
In fact, early this morning, Patience Haggin and Suzanne Vranica, reporting for the Wall Street Journal, wrote that Musk is trying to calm advertisers who are threatening a boycott if he brings Trump back to the platform. “Madison Avenue,” they noted, “isn’t sold on Elon Musk’s takeover of Twitter Inc. Advertisers are concerned about the billionaire’s plans to soften content moderation and what they say are potential conflicts of interest in auto advertising, given that he is chief executive of Tesla Inc… Musk said this spring that as owner of Twitter he would reinstate Trump’s account, which the platform suspended indefinitely after linking Trump’s comments to the Jan. 6 Capitol riot. That would be a red line for some brands, said Kieley Taylor, global head of partnerships at GroupM, a leading ad-buying agency that represents blue-chip brands. About a dozen of GroupM’s clients, which own an array of well-known consumer brands, have told the agency to pause all their ads on Twitter if Trump’s account is reinstated, Taylor said. Others are in wait-and-see mode. Taylor said she expects to hear from many more clients if Trump’s account returns.”
Musk told advertisers that he has no intention of turning Twitter into “a free-for-all hellscape, where anything can be said with no consequences!” He said that in addition to following laws, Twitter must be “warm and welcoming to all” and that Twitter aims to be a platform that “strengthens your brand and grows your enterprise.” Trump claims he won’t rejoin Twitter if he’s invited back.
Advertising provided 89% of Twitter’s $5.08 billion revenue in 2021. Musk has said he hates advertising. In a series of tweets earlier this year, he suggested Twitter should move toward subscriptions and remove ads from Twitter Blue, a premium program that gives users additional features.
Musk describes himself as a “free speech absolutist” and has said Twitter should be more cautious about removing tweets or banning users.
Musk may have reasons to avoid any drastic changes to Twitter’s ad business. Twitter will take on $13 billion in debt in the deal. The online-ad markets already are shaky, amid concerns about the economy, with Snap Inc. and Alphabet Inc. posting lower-than-expected revenue results for the September quarter.
Like other ad-supported social-media platforms, Twitter provides advertisers with adjacency controls, tools that are meant to ensure ads don’t appear next to certain content the brands deem objectionable.
Some ad buyers said Twitter lags behind its competitors in providing so-called brand safety features. Joshua Lowcock, global chief media officer at UM Worldwide, an ad agency owned by Interpublic Group of Cos., called Twitter’s adjacency controls inadequate and “poorly thought through.”
Ad agency Omnicom Media Group evaluates the major social-media platforms’ progress on brand-safety tools every quarter. In July, Omnicom rated Twitter’s progress behind that of YouTube, Facebook, Instagram, TikTok and Reddit, according to a document reviewed by The Journal. Robert Pearsall, managing director of social activation at Omnicom Media Group, said Twitter has made agreements to improve its brand-safety controls to meet Omnicom’s standards, but it hasn’t introduced those changes to the market yet.
“There are significant concerns about the implications of a possible change to content moderation policy,” he said. Twitter has said it is working on tools to give advertisers a better idea of where their ads appear.
Automotive manufacturers have expressed concerns about advertising on Twitter under Musk’s ownership, given his role at electric-vehicle juggernaut Tesla, some ad buyers said. Advertisers often share data with Twitter and other platforms— on their own customers or people that are in the market for a car— to help target their ads at the right people. Some auto companies will be wary of doing so, out of concern that data may leak to Tesla, the buyers said.
Though Twitter relies on ad dollars, it isn’t one of the biggest players in the digital-ad economy. The company gets about 1.1% of U.S. digital-ad spending, according to Insider Intelligence, a much smaller slice than Google, Meta Platforms Inc. or Amazon.com Inc.
Already, there have been signs of anxiety on Madison Avenue about Musk’s takeover of Twitter. In July, the company reported a 1% decrease in second-quarter revenue, which it blamed on uncertainty over the deal as well as broader pressures in the digital ad market.
Given Musk’s past remarks on advertising, some advertisers wonder if Musk may exit the ad business entirely.
“The question we keep getting asked is: Do we think Musk will turn off ads completely?” said UM Worldwide’s Lowcock.
This morning, Wired predicted chaos. Chris Stokel-Walker wrote that people who use, study, or work at Twitter are concerned “that the world may lose an imperfect but uniquely open online space. If Musk carries through on his ideas even partly, Twitter users could see big and confusing shifts in the platform’s features and social dynamics. Musk’s most consistently stated ambition for his version of Twitter is for it to function as a ‘digital town square’ that provides a forum for free speech where any person is welcome. That may sound laudable to many, but while Twitter, like other big social platforms, currently tries to remove harassment and other objectionable content, Musk has said he is opposed to any ‘censorship that goes far beyond the law’ and wants to fix Twitter’s ‘strong left-wing bias.’ In the US, this would translate to an ethos of just about anything goes. In late April, after Twitter accepted Musk’s offer, bot watchers saw a flurry of new right-wing accounts and warned that people who had abandoned Twitter after their posts or accounts were consistently removed by moderators were returning to the site in anticipation of the Musk regime. All of this has led experts in online moderation— including some on Twitter’s online safety advisory council— to fear Musk will usher in a new era of trolling on the platform. ‘A Musk-owned Twitter could be disastrous for women and marginalized communities already facing abuse and targeted harassment on the platform,’ says Christopher Bouzy of Bot Sentinel, a popular bot-detection system.”
Still, Musk has claimed that “Twitter is obviously not going to be turned into some right wing nuthouse.”
They reported that Musk has already helped reduce the number of people working at Twitter. Current and former employees have said throughout the acquisition saga that many people left the company due to uncertainty or concerns about the entrepreneur’s plans. More than 500 staff members have left in the last 90 days, according to LinkedIn data analyzed by Business Insider… As Musk takes his seat at the head of Twitter, it’s not just staff members who are thinking of jumping ship. Twitter’s users— the very thing that makes the site a viable public forum, and therefore a potentially viable business— are talking of their last week on Twitter. If their threats are more than hot air, that could perhaps be the biggest change of all.”