It’s been less than a month since Elon Musk took over Twitter and the impact of it has already been huge. The acquisition felt more like the richest man on earth playing with his money than a carefully thought-out investment.
Ever since Elon took the reins, he made a number of, let’s say, questionable decisions. And regardless of how you may personally feel about him, one thing is for certain: the pre and post-Musk eras of Twitter are two wildly different things.
But how does all of this affect marketing?
The free speech conundrum
Unfortunately, marketing doesn’t work in a vacuum completely separated from day-to-day political and societal issues. Among other things, brands try to capture the zeitgeist, raise awareness about topics they care about, or simply capitalize and sell as many products as they can. Some do it better, and some do it worse. For example, Pepsi’s BLM commercial with Kendall Jenner first comes to mind as a horrible idea.
Elon considers himself a free-speech absolutist. He started firing people left and right, including the content moderation team. While his free speech position and low regulation policy can be challenged or not, they are not something big brands are fond of.
A certain number of large brands already stopped advertising on Twitter. Twitter revenues are down and it is reportedly losing 4$ million dollars daily. Naturally, Elon is blaming activist groups who are trying to destroy free speech in America.
Brand safety and suitability
Lou Paskalis, the president and COO of MMA global addressed that directly and voiced his concerns to Elon:
“Elon, Great chat yesterday, As you heard overwhelmingly from senior advertisers on the call, the issue concerning us all is content moderation and its impact on BRAND SAFETY/SUITABILITY. You say you’re committed to moderation, but you just laid off 75% of the moderation team!
Advertisers are not being manipulated by activist groups, they are being compelled by established principles around the types of companies they can do business with. These principles include an assessment of the platform’s commitment to brand safety and suitability.”
In other words, no established brand wants its name to be seen next to hate speech content. And why would they? My personal opinion is that such brands have a lot to lose while having little or nothing to gain. Cutting budgets for advertising on Twitter right now is a logical decision. Brands are smart to wait and see what will the future bring for the network.
Elon, a free-speech absolutist, didn’t respond to those concerns and instead blocked Paskalis.
The domino effect
It’s clear Elon is very angry with advertisers backing off. He went so far as to threaten to publically name and shame advertisers who don’t want to advertise on Twitter anymore.
I doubt making such ultimatums will motivate brands to pump up their advertising budgets. And as a marketer myself I don’t want to work with a platform ready to treat me or others like myself that way. I expect this will make even more brands stay away from Twitter.
And with advertising revenue down, Elon has to come up with other money-making techniques. How about Twitter users paying
20$ 8$ monthly to have their accounts verified? Well, this idea is also problematic – to say the least. The backlash to it has been big, and Elon, a free-speech absolutist, banned verified users who parodied him. And this idea crashed and burned pretty soon after it had some disastrous results.
This and other things motivated users to leave the social network. And with fewer users in the future, advertisers will probably cut their budgets even more, which will force Elon to come up with other income avenues. And if those ideas are again silly, even more users will leave Twitter and the vicious circle will continue.
The sinking ship
So far the post-Musk era of Twitter has been puzzling and erratic. Elon is behaving strangely, making questionable and impulsive decisions (later even backing out on some of those). It’s like he is using his Twitter profile to brainstorm his ideas publically for all the world to see. As if the giant social network is just a sandbox environment for the billionaire to play in as he pleases.
This however has consequences and will affect both users and advertisers alike. So far the reactions were almost exclusively negative. I expect even more brands to either leave Twitter or greatly cut their budgets.
At the same time, I don’t see Twitter having an influx of new brands ready to advertise there. Right now there is no reason for newer non-extremely-niche brands to include Twitter in their marketing plans as an important network to advertise on.
And all of this happened in the span of less than a month. I fear the situation will only get worse and that Twitter is a sinking ship.
Only one question remains: will the captain go down with his ship?