A week into owning Twitter, billionaire tech titan Elon Musk fired half the company’s employees, leaving the task of carrying out his aggressive plans to generate new subscription revenue to the remaining 3,700 or so Tweeps. And that’s while many advertisers have frozen spending on Twitter over concerns about exactly what kinds of “free speech” Musk is going to allow.
Media and entertainment companies with a presence on Twitter — which is to say, the entire industry — are watching Musk’s unpredictable moves carefully, with many uncertain how they’ll proceed.
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Some digital marketing experts counsel erring on the side of caution. “As we’ve seen with prior [ad spending] pauses on other platforms, there is more upside to reinforcing brand position than downside in missing out on short-term performance,” says Bain & Co. partner Laura Beaudin, who leads the consulting firm’s marketing and customer strategy practice.
Musk groused that “activist groups” have pressured marketers to halt spending with Twitter, leading to a massive drop in revenue, even though its policies haven’t changed. He also claimed he had “no choice” in laying off 50% of Twitter staff, because the company had been losing $4 million per day (and Musk is saddled with $13 billion in debt he needed to close the deal).
Since Musk’s Twitter takeover saga kicked off in April, there’s been a 30% pullback in ad spending on the platform, according to Ellie Bamford, global head of media and connections at IPG-owned creative agency R/GA. She says a wait-and-see stance is the right course, because brand safety — ensuring ads don’t appear adjacent to hateful or objectionable content — remains paramount.
“Many brands are flocking to platforms that appear more stable, like TikTok,” says Bamford. The current situation with Musk at the helm of Twitter “is unpredictable and chaotic, and bad actors and unsafe behaviors thrive in such an environment. At this moment, we cannot confidently state that Twitter is a safe place for brands or users to be.” Yoel Roth, Twitter’s exec in charge of safety and integrity, wrote in a Nov. 4 post that only 15% of his team was cut and that the “mission of enforcing our policies and protecting the conversations happening on Twitter remains unchanged.”
Even amid the upheaval, so far there’s been no noticeable overall change in negative sentiment directed at Twitter advertisers, and some brands are registering zero negative comments on the platform, says Jim Tobin, founder-CEO of social marketing agency Ignite Social Media.
In general, brands will need to maintain a profile on Twitter, says Kevin Palmer, co-founder and executive VP of emerging media and innovation at digital agency Convertiv. “It’s still a prime customer-service outlet for a lot of brands, amongst other uses,” he says. “Making plans based on speculation would be a waste of energy.”
What about Musk’s demand that accounts pay $8 per month for Twitter verified status? Palmer says it will likely behoove companies to sign on to thwart potential confusion: “Ultimately, it comes down to brand protection.”
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