PM Jacinda Ardern acknowledged that social media platforms can do ‘a huge amount of harm’ if misused and hopes that new owner Elon Musk will stick to his ‘principle of transparency’. Video / NZ Herald
Elon Musk’s tumultuous reign at Twitter has led to a damaging rift with top brands and marketers, with the social media company’s $5ba-year advertising business hit by tensions over content moderation and resources.
advertising agencies and media buyers told the Financial Times that nearly all of the big brands they represent have paused spending on the social media platform, citing alarm at Musk’s ad hoc approach to policing content and decision to ax many of its ad sales team.
Musk, meanwhile, has sought to personally call chief executives of some brands that have curbed advertising in order to berate them, according to one senior industry figure, leading others to instead reduce their spend to the bare minimum required so as to avoid further confrontation with the billionaire entrepreneur.
After several waves of job cuts and departures, Twitter’s ads business team has shrunk so much that many agencies no longer have any point of contact at the company and have received little to no communication in recent weeks, according to four industry insiders.
Some brands have been unable to get feedback on how previous campaigns have performed because of the staffing shortages, one media buyer said. Others are complaining that Twitter’s ads systems have also become buggy, making it difficult or even impossible to run campaigns.
“It is quite unique. The turmoil, the damage, nothing of this magnitude has happened before. Never,” said a senior executive at a big four advertising agency.
“He seems to put off even those advertisers who wanted him to succeed,” another top advertising agency executive said.
Musk is under pressure to draw revenues from Twitter, as he faces $1bn in annual interest payments after loading the company with $13bn of debt to help fund his acquisition of the business.
On October 27, the day he closed his $44bn deal to buy Twitter, the Tesla and SpaceX chief executive sought to reassure marketers that the platform would not become a “free-for-all hellscape” despite his plans to relax content moderation restrictions.
Soon after, he conducted rounds of calls and meetings to reassure top advertising agencies and brands. One email, sent in early November and seen by the Financial Times, said of Musk: “He’s one of the greatest innovators in the world, and he understands our platform and product at a level that few people do. He wants to ship exciting things, and he wants to do it quickly.”
In the meetings, Musk appeared across all the details of how the platform is run, two agency executives said, impressing brands with his knowledge. “He knows more than that [former chief executive] Jack Dorsey ever did. He has immersed himself very deeply in the business,” a senior executive at a top advertising agency said.
However, the relationship soon soured after Musk laid off more than half of the company’s 7,500 workforce, upending Twitter’s ads sales team and trust and safety team, and heightening concerns that misinformation and hate speech could proliferate on the platform.
Groups such as General Motors, Volkswagen, Carlsberg and General Mills have announced that they would pause spending on the platform given the moderation concerns.
Many in the advertising industry have struggled to keep track of the changes. Robin Wheeler, who started heading up Twitter’s ads sales business under Musk after the former chief Sarah Personette resigned, left the company last week. Bloomberg reported that Wheeler was fired by Musk after refusing to sack more people in the ad sales team. Twitter and Musk did not respond to requests for comment.
To the team and my clients… you were always my first and only priority.
— Robin Wheeler (@robinw) November 19, 2022
Musk’s own use of Twitter — including reposting conspiracy theories and interacting with controversial accounts — has also unnerved brands who fear their content being placed next to toxic posts.
The self-described “free speech absolutist” has further irked advertisers when he relaunched Twitter’s premium subscription service, Twitter Blue, as its “blue tick” feature was abused by impersonators, targeting politicians and brands such as Eli Lilly and Lockheed Martin. He initially paused the rollout of the service until there is a “high confidence of stopping impersonation”, saying on Friday that he would aim to launch it the following Friday.
Last week, Musk also began to reverse certain permanent bans of high-profile figures, such as former US president Donald Trump, despite previously pledging not to do so until he had convened a content moderation council of experts.
When asked on Tuesday why he reversed the bans without setting up the council as promised, Musk said “a large coalition of political/social activist groups agreed not to try to kill Twitter by starving us of advertising revenue if I agreed to this condition”. He added: “They broke the deal.” Several left-leaning groups have been pressuring brands to pull their spending.
The shake-up appears to have had a knock-on effect on Twitter’s advertising technology. Gabby Krite, Head of Digital Operations at The Kite Factory, which used to spend “hundreds of thousands” of dollars per year on the platform, said she was experiencing technical difficulties in placing or changing advertising campaigns. “Tech issues on campaign management … mean it’s completely unreliable as a platform to use,” she said.
Analysis by left-leaning non-profit Media Matters suggested 50 of the top 100 advertisers — accounting for $750m in advertising in 2022 — had paused or announced their intention to pause spending since Musk took the helm, and a further seven had reduced spending to the trickle. Those 50 advertisers accounted for $317m of Twitter’s $5b in revenues in 2021, Media Matters said.
Agencies too have put out directives. In mid-November, Omnicom Media Group recommended clients pause spending on the platform, according to three people familiar with the move, following a similar recommendation from Interpublic. Last week WPP’s GroupM raised their assessment of the risk of advertising on the platform to “high risk”, two people familiar with the situation said.
Omnicom declined to comment. Interpublic and GroupM did not immediately respond to a request for comment.
It is unclear if and when brands will return. “It’s hard to have criteria [for returning to the platform] when Musk manages by tweet and something changes on the platform every day that causes advertisers concern,” said an executive at another advertising agency.
“Musk’s best chance of bringing advertisers back to Twitter is to appoint a new CEO,” said Darren Savage, chief strategy officer at Tribal Worldwide. “Particularly, one who understands what Twitter is, has the credibility with advertisers, and users — and is then left alone to do their job.”
Written by: Hannah Murphy in San Francisco, Alex Barker and Arjun Neil Alim in London
© Financial Times