Elon Musk’s turbulent reign at Twitter has led to a devastating feud with top brands and marketers, as the social media company’s $5 billion a year advertising business is hit by tensions over content and resource moderation.
Several advertising agencies and media buyers told the Financial Times that all of the big brands they represent have paused spending on the social media platform, citing alarm at Musk’s ad hoc approach to content moderation and his decision to fire several of his ad sales team.
Meanwhile, Musk has sought to personally contact the CEOs of some of the brands that have blocked the ads in order to rebuke them, according to one senior industry figure, prompting others instead to reduce their spending to the minimum required to avoid further confrontation with the billionaire businessman.
After several waves of job cuts and departures, the Twitter Ads staff has shrunk so much that many agencies no longer have any point of contact at the company and have received little or no contact in recent weeks, according to four industry insiders.
A media buyer said that some brands were unable to get feedback on the performance of previous campaigns due to staff shortages. Others complain that Twitter’s ad systems are also becoming buggy, making it difficult or even impossible to run campaigns.
“It is unique. Disruption and damage: Nothing of this scale has ever happened before. Never,” said a senior executive at the Big Four advertising agency.
“He seems to be putting off even those advertisers who wanted him to succeed,” said another senior ad agency executive.
Musk is under pressure to draw in revenue from Twitter, as he faces $1 billion in annual interest payments after racking up $13 billion in debt to help fund his acquisition of the company.
On Oct. 27, the day he closed his $44 billion deal to buy Twitter, the CEO of Tesla and SpaceX sought to reassure marketers that the platform would not become a “free-for-all” despite his plans to loosen restrictions on content moderation.
Soon after, he made rounds of calls and meetings reassuring advertising agencies and brands. One email, sent in early November and seen by the Financial Times, said of Musk: “He is one of the world’s greatest innovators, and he understands our platform and our product on a level that few people know. He wants to ship exciting things, and he wants to do it.” quickly “.
Two of the agency’s executives said that in meetings, Musk came up with all the details of how to operate the platform, impressing brands with his knowledge. “He knows more than that [former chief executive] Jack Dorsey did it. “He immersed himself deeply in the business,” said a senior executive at a prominent advertising agency.
However, the relationship quickly soured after Musk laid off more than half of the company’s 7,500-strong workforce, upended Twitter’s advertising sales force and trust and safety team, and raised concerns about the spread of misinformation and hate speech on the platform.
Groups such as General Motors, Volkswagen, Carlsberg and General Mills have announced that they will pause spending on the platform due to moderation concerns.
Many in the advertising industry have struggled to keep track of the changes. Robin Wheeler, who began running the Twitter ads sales business under Musk after former boss Sarah Personnette resigned, left the company last week. Bloomberg reported that Musk fired Wheeler after refusing to fire more people on his ad sales team. Twitter and Musk did not respond to requests for comment.
To the team and my clients… You have always been my first and only priority.
– Robin Wheeler (robinw) November 19, 2022
Musk’s private use of Twitter – including re-posting conspiracy theories and engaging with controversial accounts – has also alarmed brands who fear placing their content next to toxic posts.
The self-described “freedom of speech” further angered advertisers when he relaunched Twitter’s premium subscription service, Twitter Blue, whose “blue flag” feature has been abused by impersonators, targeting politicians and brands like Eli Lilly and Lockheed Martin. . He initially paused the launch of the service until there was “high confidence in stopping impersonation”, saying on Friday that he would aim to launch it the following Friday.
Last week, Musk also began to permanently unblock some high-profile figures, such as former US President Donald Trump, despite previously vowing not to do so until he convened a panel of experts to moderate content.
When asked on Tuesday why he would reverse the ban without forming 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 you agreed to that condition.” “They broke the deal,” he added. Many left-leaning groups are pressuring brands to withdraw their spending.
The change appears to have had a significant impact on Twitter’s advertising technology. Gabby Crete, head of digital operations at The Kite Factory, who was spending “hundreds of thousands” of dollars a year on the platform, said she was having technical difficulties setting up or changing ad campaigns. “Technical issues in managing the campaign . . . that means it is not entirely reliable as a platform to use it.”
Analysis by the left-leaning nonprofit Media Matters suggested that 50 of the top 100 advertisers — accounting for $750 million in advertising in 2022 — have either paused or announced their intention to pause spending since Musk took the helm, cutting Seven others spending to scanty. Media Matters said those 50 advertisers represented $317 million of Twitter’s $5 billion in revenue in 2021.
The agencies have also issued guidance. In mid-November, Omnicom Media Group recommended customers 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 its assessment of the risks of advertising on the platform to “high risk,” two people familiar with the situation said.
Omnicom declined to comment. Interpublic and Group M did not immediately respond to a request for comment.
It’s unclear if and when the brands will return. “It’s hard to have standards [for returning to the platform] “When Musk runs by Twitter and something changes on the platform every day it worries advertisers,” said an executive at another advertising agency.
“The best chance for Musk to bring advertisers back to Twitter is to hire a new CEO,” said Darren Savage, chief strategy officer at Tribal Worldwide. “In particular, someone who understands what Twitter is, has credibility with advertisers and users – and is then left alone to do his or her job.”