Elon Musk Hates Ads. Twitter Needs Them. That May Be a Problem.

,I hate advertisingElon Musk tweeted in 2019.

The world’s richest man has made it clear that advertising is not a priority since he began chasing Twitter’s $ 44 billion acquisition – and for years before that. He has talked of making money from Twitter through other means, such as charging some users to stay on the site. It also suggests that the service seeks to relax content moderation policies, which marketers say have helped prevent ads from appearing with unpleasant speech and misinformation.

But as Mr. As Musk prepares to take over Twitter, he can quickly discover that Twitter needs Madison Avenue in another way.

Advertising accounts for about 90 percent of Twitter’s revenue. Not so long ago Mr. With the acquisition of Musk, many of the agency’s leaders were indifferent to the ads on the service. They have many complaints tanks, in which the company almost never targets ads as well as competitors like Facebook, Google and Amazon.

Now, numerous advertising officials say they are willing to move their money elsewhere, especially if Mr. Musk removes the security that allowed Twitter to remove racist rents and conspiracy theories. Mr. Musk’s Twitter vision is a paradise for free speech with business relations that keeps it going.

But Twitter co-founders and at least some investors who are Mr. Musk’s bid rejects the need for advertising and insists the company needs to separate from it. Twitter’s position as a “public company entirely dependent on the advertising business model” has been fueled by problems with its bots, abuse and censorship. Said Ben HorowitzA common partner of venture capital firm Andreessen Horowitz, which is investing $ 400 million in an attempt to privatize Twitter.

Jack Dorsey, co-founder of the company, agreed. “That’s right. He needs a cover for a while,” he said. Dorsey Said in a tweet Horowitz responding to Mr.

Advertisers said such a shift would hurt Twitter. “At the end of the day, it’s not brands that need to worry because they’ll just spend their budgets elsewhere – it’s Twitter that needs to worry,” said David Jones, longtime advertising executive and chief executive. Brandtech Group, a marketing technology company. “If you tell me TikTok is gone, it will be a disaster. But is Twitter getting away? Yes, whatever. “

Immediately after Mr. Musk struck a deal last week to buy Twitter, according to some people who received regulatory filings and messages, company executives began reaching out to advertising clients. The executives assured that the business would proceed as usual and the lines of communication would remain open. Brand safety has been a “priority,” they said.

Representatives of Twitter also noted that it may be months, if not more than a year, before any serious changes take effect, advertising officials said.

At Twitter’s annual NewFrontes presentation for advertisers at Pier 17 in New York on Wednesday night, company representatives emphasized the value of Twitter for marketers: as a top place for people to gather and discuss major cultural moments, such as sporting events or the Matt Gala. Post presenters promised to help brands reach a segmented audience, and officials repeatedly thanked advertisers and agencies for their trust and cooperation.

Mr. Musk’s pending acquisition, and what it might mean for advertisers, was not mentioned during the brief presentation.

JP Mahu, vice president of global client solutions, joked on Twitter, “It’s been a quiet month on Twitter.”

Delegates for Mr. Musk did not respond to a request for comment on Twitter about his plans for the ad. Twitter declined to comment.

Twitter is different from Facebook, where millions of small and medium-sized advertisers generate most of the company’s revenue and rely on its huge size and targeting capabilities to reach customers. Twitter’s customers are heavily loaded with large, mainstream companies that tend to be wary of their ads appearing with problematic content.

Twitter derives most of its advertising revenue from brand awareness campaigns, the effectiveness of which is more difficult to evaluate than ads that target users based on their interests or that force direct feedback, such as by clicking on a website. The company has spent years trying to make its platform a better destination for measurable sales-generating ads and redesigned its ad server in 2019 and 2020 to meet marketer demand. In March, Twitter began allowing advertisers in the United States to add shopping catalogs. Demonstrated top products For anyone visiting their profile.

Twitter’s reach is even narrower than most competitors, with 229 million users viewing ads, compared to 830 million users on LinkedIn and 1.96 billion daily users on Facebook. Stiffel analysts recently wrote to consumers that Twitter is “still considered a niche platform by many in the advertising industry.”

Last month, Twitter said its આવક 1.2 billion revenue for the first three months of the year was up 16 percent from a year earlier, but lagged behind the company’s growth rate. While it was profitable in the quarter, the company has lost money in eight of the last 10 years.

In ad agency Chemistry, whose clients include healthcare companies and national restaurant chains, Twitter accounts for about 10 percent of the social media budget, said Jason Diley, who oversees media planning.

“LinkedIn’s choices have also captured the potential for us to target customers beyond what Twitter has to offer,” he said. “We’ll go where the results come from and with so many of our clients, we haven’t seen performance on Twitter in terms of advertising with other platforms.”

But for Mr. For Diley and many others, Twitter’s attitude towards content controls was a bright spot. In 2019, it banned all political advertising. The company has issued warning labels about election misinformation, dispelled lies about vaccines and, following last year’s Capitol riots, former President Donald J. Banned Trump permanently. Last month, in response to the war in Ukraine, the platform stopped expanding Russian government accounts and began blocking some tweets containing images of prisoners of war. Days before the deal with Mr. Musk was announced, Twitter said it would Prohibit ads that deny climate change,

“Twitter has worked better than many platforms to build trust with advertisers – they’ve been more progressive, more responsive and more humble to start learning ways,” said Mark Reid, WPP’s chief executive, one of the largest advertising companies. In the world.

Now, many advertisers say that although they will wait to see if Mr. Musk does, they are worried that a decade of defensive scaffolding will be demolished.

“We can safely say that if content moderation policies change, and if we have no way to protect the brand, we will definitely recommend to our customers that they withdraw their investments,” said Arun Kumar. Chief Data and Technology Officer at Ad Giant IPG.

Some advertising officials said they suspected Mr. Musk will address his concerns because of his track record with the industry.

Mr. Musk, founder of the successful electric car company Tesla and rocket company SpaceX, does little marketing for those businesses. On Twitter, he criticized the ads. “Tampering with public opinion“And discussed his refusal.”Pay for fake endorsements to celebrities, While writing in it After deleting the tweet About Twitter Blue, the recently launched $ 3-a-month subscription service, pushed for “no ads” and explained that “the power of corporations to make policy is much greater if Twitter relies on advertising money to survive.” . “

“I don’t think he cares about the advertising experience on Twitter because he never cared about advertising,” said Harry Cargman, chief executive of mobile advertising company Cargo. “I don’t think it’s about persuading advertisers to spend money on platforms rather than automating them.”

Mr. Musk has suggested that Twitter focus on subscriptions; Others have suggested a payment model per tweet. But some ad executives hope Mr. Musk’s competitive spirit will inspire him to reset Twitter as a powerhouse marketing machine.

“There is a fork in the road, where Path A leads to an unfiltered location with the worst human behavior and no brand wants to go anywhere near it,” he said. Jones of Brandtech. “And Path B has one of the world’s most talented entrepreneurs who knows a lot about running companies, spreading a wave of innovation that people look back on for a few years and say, ‘Remember when everyone was worried about Musk coming?’ “

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