“I hate advertising”, tweeted the soon-to-be owner of Twitter, Elon Musk, in 2019.
This is a viewpoint for the divisive entrepreneur that has remained throughout the 3 years since he pressed ‘send’. Considering how often Musk has joked or backtracked about rather serious topics, his refusal to back down or change tack on this will surely be ringing alarm bells for marketers following the Tesla & SpaceX CEO’s acquisition of the social media site earlier this year.
But what will happen to ads when the ‘Musk Era’ truly begins at Twitter, and what can you do to prepare for a potential ads headache waiting to occur?
The short answer is yes. The longer answer, however, is still yes – but Musk has plans on how to relax Twitter’s reliance on third party advertising and organic boosting.
It’s estimated that 90% of Twitter’s revenue is made via advertising. These can be pre-roll adverts before a video plays, product placements in the Trending tabs, or simple organic boosting that shows up on a user’s timeline.
Musk’s golden playbook for Twitter’s takeover includes a bevy of plans on how to make the platform more self-sustainable. These include a service that charges commercial and government users to have accounts on the site, with Musk promising that casual users will be able to access the site for free. It’s uncertain if these will be levied upon journalists and non-profits as of yet.
This planned move has potential to be good for the long-term health and marketability of Twitter ads, cutting down on bots and spam accounts, building up trust on the site as humans will be authenticated, and so marketers get a clearer picture of their conversion rates. However, this in itself opens a can of worms when it comes to organic marketing – while Musk has said it will be a ‘slight’ cost, there is no confirmation or promise that it will remain low and accessible for all. This could effectively price smaller companies and those that do not have a large budget for social media marketing off the site completely – or risk being permanently banned by trying to pass as a personal user.
Well, here’s where the problems come for Twitter, and more specifically for Elon. It appears Twitter needs the marketers far more than the marketers need Twitter.
Twitter is still seen by many as a relatively niche platform by which to advertise on via paid means. Twitter reaches an average of 339 million users per day with paid-for adverts. This sounds great, but it’s utterly dwarfed by Instagram and Facebook, which reach an estimated 830 million and 1.96 billion users per day respectively. Coupled with implemented dashboards and access to intricate metrics, it’s definitely easier to advertise on Meta-owned social networks than it is Twitter, and you’ll be getting more bang for your buck as well!
Not only is Twitter hindered by its comparatively smaller advertising base, it could also greatly suffer in terms of attractiveness to marketers by Musk’s controversial plans to relax content moderation.
Musk has always been an outspoken supporter of ‘free speech’ and has spoken out against people being ‘cancelled’ for their views. To some users, he is an arbiter of freedom of expression, but to many marketers he is creating a PR nightmare waiting to happen.
Musk noted in his press release when announcing his successful bid for Twitter that “free speech is the bedrock of a functioning democracy, and Twitter is the town square where matters vital to the future of humanity are debated.” Alongside his opinions on cancel culture that he’s made public in the past, it’s likely this means rolling back the content moderation.
Due to the public and global nature of the site, Twitter can host inflammatory posts and arguments much easier than other networks. And, with that, comes a higher volume of offensive content.
Unsurprisingly, advertisers aren’t big fans of having their content appear next to offensive or discriminatory content. There is a whole laundry list of events that have caused advertisers to pull their ads, or at least pause campaigns due to controversy.
In 2017, for example, brands and advertisers pulled ads from YouTube, which is owned by Google, after it came to light that their adverts were being shown in pre-rolls or alongside videos that promoted terrorism and antisemitism. Google moved quickly to remedy this, giving advertisers more control over what types of content they target with their ads, and removing offensive content. Even today, when creators step out of line on YouTube, the site will almost always side with the advertisers, ‘demonetising’ the creator for weeks or even months.
After this, larger advertisers have begun to leverage their financial power over sites such as Facebook, with over 1,000 large companies, such as Coca Cola and Unilever, pausing ad campaigns on Facebook-owned sites, seeking an increase in the enforcement of hate speech on the sites.
Many users and businesses have been decidedly lukewarm about spending their money on Twitter already, mainly due to the lack of audience compared to other networks and the advertiser support offered, or rather the lack thereof. Many of these companies have now said if Musk implements his plan to relax content moderation on the site, they’ll be happy to cease advertising on the site and move their budgets elsewhere.
Musk’s takeover will cause waves, for definite – but marketers have all the power in these situations nowadays.
As we mentioned earlier, Twitter has 90% of its revenue come from advertising via third parties. Making Twitter self-sustainable at this point may not be possible considering its size, and if it can be done, it definitely can’t be done in the sort of time frames Musk seems to be aiming for. For the time being, it’s likely ads will be here to stay.
While organic marketers might struggle with the proposed changes, the paid marketers will be able to let Musk and the Twitter board know of their thoughts via pulling advertising. It seems Musk believes that marketing and advertising will change following his plans being implemented, but that’s likely to be the opposite – marketers will simply pull their adverts and go elsewhere.
The money won’t disappear, it’ll just be absorbed by campaigns that are being hosted on sites like Facebook, Instagram and LinkedIn. And while Musk may be the richest man in the world, it’s unlikely he’ll want to self-fund Twitter at all, let alone for as long as it may take to implement his changes to make the site able to stand on its own two feet without advertising revenue.
David Jones, a chief executive of the Brandtech Group, said it best when asked about the Musk ‘revolution’:
“It’s not brands that need to be concerned, because they’ll just spend their budgets elsewhere. It’s Twitter that needs to be concerned. If you said to me TikTok was going away forever, I’d panic. It’d be a disaster. But Twitter? Yeah, whatever.”
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9 Steps to Building an Irresistible Business Case for Content MarketingSophie Mizrachi ● March 10, 2023