May 29, 2023

After Elon Musk’s stunt on Twitter, advertisers might think twice for now

Hours before news broke Thursday that he had completed his $44 billion purchase of Twitter, Elon Musk wrote an open letter to advertisers stressing that he doesn’t want the platform to turn into a “free-for-all hell.”

But that effort to appease the advertising industry, which makes up the bulk of Twitter’s business, quickly overshadowed Musk’s first days as the platform’s new owner. Some industry experts are now predicting that the advertiser exodus may come sooner than expected.

In the first 24 hours of his ownership, there were several reports that racist comments, hate speech and other inappropriate content had increased significantly on Twitter as users tested Musk’s promise that he would allow “free speech” on the platform. Then, over the weekend, Musk was widely criticized for tweeting (then deleting without reason) a link to a conspiracy theory about a violent attack on House Speaker Nancy Pelosi’s husband, Paul Pelosi.

“I think advertisers are getting ready to leave,” said Claire Atkin, co-founder of adtech watchdog Check My Ads. “It’s quite possibly a seismic shift for marketers and advertisers.”

After months of uncertainty surrounding Musk’s pending acquisition, advertisers must now face questions about how Musk will transform the platform, which is already in use in the digital ad space despite its outsized political influence. Musk, known as both an innovative entrepreneur and unpredictable character, has promised to rethink Twitter’s content moderation policies and reverse permanent bans on controversial figures, including former US President Donald Trump.

Brands have long been sensitive to the content of their ads, a problem compounded by social media. Most marketers cringe at the thought of their ads appearing alongside toxic content such as hate speech, pornography, or misinformation. And if Twitter continues to struggle with the proliferation of such content — or if Musk updates Twitter’s policies to allow some of it — companies may stop advertising there, fearing risks to their brands or because they reach smaller audiences on a regular basis. users also leave.

“If you think about the money, the investment and the care, the real care and attention that goes into connecting with consumers, and then to have your ad published alongside lies … it goes against everything a brand wants to do,” Atkin said.

Musk, who is in the past tweeted “I hate advertising” and announced that he wants to make the platform less dependent on it, is also facing the reality that about 90% of Twitter’s revenue comes from advertising. In addition to the open letter to advertisers, Musk’s team spent Monday “meeting with the marketing and advertising community” in New York, According to Jason CalacanisA member of Musk’s inner circle.

In public and private conversations with advertisers, Twitter is also stressed that its content policy hasn’t changed since the acquisition, and Musk has said they won’t change until a new content control board is appointed (apparently to replace the company the current Trust and Security Council).

But Musk may face an uphill battle. Twitter’s digital advertising business is much smaller than Meta, Google and Amazon, and doesn’t have the growth and user demographics of TikTok. And many brands have already cut back on digital ad spending in recent months amid the economic downturn. It doesn’t necessarily take much for brands to cut more.

General Motors, which competes with Musk’s Tesla, said on Friday it would suspend paying for advertising on Twitter as it evaluates “the new direction of Twitter.” CNN reached out to more than a dozen other brands advertising on Twitter on Monday, most of which did not respond. Toyota, another Tesla competitor, told CNN it was “talking with key stakeholders and monitoring the situation” on Twitter. Ben & Jerry’s said that “we have not considered taking any action at this time.”

On Monday, advertising giant Interpublic Group advised customers to suspend advertising on Twitter for the next week as it waits for more clarity on the platform’s plans for trust and security and its ability to implement those plans under new owner Elon Musk. the situation told CNN. The instructions were sent in an internal memo to IPG employees who work with clients in its Mediabrands ad buying division, which includes major consumer brands such as Coca-Cola, Johnson & Johnson, Spotify, Unilever and more.

The Global Alliance of Responsible Media, a leading coalition of advertisers and platforms including Twitter, also released an open letter to Musk on Monday, encouraging him to ensure that Twitter continues to adhere to the group’s standards that define hate speech, violence and harassment. and the insensitive treatment of controversial social issues is “unsuitable for advertising support.” In response to the letter, Musk said a Tweet, “Twitter’s commitment to brand safety remains unchanged,” and Sarah Personette, Twitter’s chief customer officer, added that the company is serious about brand safety and its partnership with the organization. (Personette tweeted on Tuesday that he resigned from the company last week.)

Also on Monday, Media Matters for America CEO Angelo Carusone tweeted urging major Twitter advertisers to “focus on Twitter right now” to better address the rise of hate and other toxic content. On Tuesday, a group of more than 40 civil society organizations, including Media Matters, the NAACP, GLAAD and the Center for Countering Digital Hate, sent an open letter to Twitter’s top advertisers urging them to stop advertising on the platform if Musk makes the cut. for content moderation.

“Advertisers are very sensitive to the changing landscape of social media,” Atkin said, adding that the question for Twitter now is “whether Elon Musk can continue to convey trust with advertisers or is he going to continue to sow uncertainty and fear.”

In response to a request for comment on this story, a Twitter representative referred CNN to previous tweets by Musk and Personette and Musk’s letter to advertisers, as well as a tweet by Yoel Roth, Twitter’s head of safety and integrity, that said the platform’s policies had not changed. – from human accounts.

Roth said in a separate tweet on Monday that the company had been “focusing on an increase in hateful behavior on Twitter” since Saturday. He added: “We’ve made measurable progress, removing over 1,500 accounts and reducing views of this content to almost zero.”

“reasonable time to rethink things”

An advertising executive told CNN on Monday that dozens of their clients had reached out in recent days seeking guidance on the situation.

“It seems like a reasonable time for advertisers to rethink things,” said David Karpf, an assistant professor at George Washington University’s School of Media and Public Affairs. “I think advertisers are going to look at this and say, is a weak Twitter ad product going to rank better or worse? And it’s going to be the same or a little bit worse… advertisers are definitely not going to start spending more on Twitter anytime soon.”

There is a precedent for advertisers quitting platforms due to hateful content. In 2020, dozens of brands publicly signed the #StopHateForProfit advertiser boycott against Facebook, calling out the platform for its “repeated failure to meaningfully address the pervasiveness of hate on its platforms”.

But when it comes to Twitter, brands may have to tread carefully to avoid a backlash. Since GM announced the suspension of Twitter advertising, some users of the platform, including some right-leaning political figures, have called for a boycott of the automaker.

Because Musk has positioned himself as a “free speech” maximalist with strong support among many conservative politicians, brands risk becoming opponents of free speech if they leave the platform. But brands also risk appearing to implicitly endorse hate speech and other harmful content if they persist, meaning many may decide to quietly stop advertising on the site without formal notice.

“It’s hard for advertisers to publicly weigh in on what’s a no-win position,” an advertising executive told CNN.

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