Elon Musk’s Twitter profile page can be viewed on an Apple iPhone mobile phone.
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When Elon Musk said last week that Twitter Having experienced a “massive drop in revenue” under his recent watch, he blamed the decline on “activist groups putting pressure on advertisers”.
His claim had some merit. A group of civil rights leaders sent a letter to the CEOs of major companies, including Anheuser-Busch, Apple, Coca-Cola and Disney, urging them to express their concerns about their site’s brand protection to Musk. Later, the group would call on businesses to stop ad spending on Twitter after what its leaders saw as a rise in racist posts and hate speech.
While Musk may be right to blame some of the revenue decline on staff pressure, at least the onus falls on him. Twitter’s new owner, the world’s richest man, recently tweeted a conspiracy theory related to the attack on House Speaker Nandi Pelosi’s husband, Paul Pelosi, and made a series of crude and crude jokes, some of which he quickly deleted.
Rachel Tipograph, CEO of ad tech firm MikMak, says businesses don’t want to link their brands to this type of behavior and content.
“Advertisers have concerns about brand safety, and that’s what this is all about,” Tipograph said. “Advertisers don’t want to be associated with what’s happening on Twitter right now.”
Companies prefer general motor And Volkswagen halted its spending on Twitter following Musk’s arrival, while advertising titan Interpublic Group advised its clients to do the same. The boycott has created a significant problem for the social media service, which makes 90% of its sales from advertising.
compared to larger rivals Facebook And Google, Twitter has never developed an online advertising business that matches the scale of its influence on popular culture and society. Twitter has lost money in six of the eight years since its IPO. Its revenue is expected to reach $5 billion in 2021, while Facebook posted $118 billion in sales and Google parent Alphabet recorded $257 billion in revenue.
Twitter’s revenue in the second quarter fell from a year ago.
“In my humble opinion, to use a very technical term, their business is bad, and they need a radical transformation,” said Len Sherman, associate professor of business at Columbia Business School.
It’s a business Musk spent $44 billion to buy. As part of the deal, he borrowed $13 billion, which he had to pay back.
For that investment, he got “a company with very weak targeting capabilities in an ad-based business where it’s essential,” Sherman said. “I’m kind of laughing because I keep getting Twitter ads in my stream that would be better directed at 13-year-old girls.”
On Wednesday, Musk held an audio meeting with advertisers on “Twitter Space.”
Twitter did not respond to a request for comment.
Musk didn’t do himself any favors after the acquisition closed in late October. In addition to his own questionable tweets and retweets, he has been inconsistent in defining what he means by free speech and acceptable content on the platform, and he also fired nearly 50% of Twitter’s staff almost immediately, raising further questions about content moderation.
Companies usually stop their ad campaigns if they feel they may suffer reputational damage. For example, businesses boycotted Alphabet’s YouTube in 2017 over concerns that their ads would run alongside extremist videos.
YouTube executives responded quickly at the time, allowing third-party verification of content and hiring more people to remove offending videos. Advertisers returned and business quickly recovered.
Musk would rather take a combative approach to advertisers. In response to a tweet suggesting that Twitter name the brands it’s boycotting, so that its followers can turn around and boycott them, Musk said “a thermonuclear name and shame on exactly what will happen if it continues.”
Meanwhile, Mask is taking a complex approach to banning users. Comedian Kathy Griffin was booted for impersonating Musk on the site, while Sarah Silverman had her account temporarily locked for a similar offense.
Jeff Seibert, Twitter’s former head of consumer products, called it “a mistake for Elon to be the face of content moderation.” In the past, Twitter has taken a team approach to policy violations.
“If you put one person in charge of it, I think you start to see random decisions like that [cause people to] Lose faith,” Seibert said.
Kathy Griffin attends the premiere of ‘A Hell of a Story’ during the 2019 SXSW Conference and Festival at Zach Theater on March 11, 2019 in Austin, Texas.
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Twitter’s ad business has already begun to falter under Musk.
Data from MikMak, whose clients include Colgate, Unilever and General Mills, shows a massive pullback in ad spending on Twitter. From October 1 to November 7, Twitter suffered a 68% drop in media traffic, which refers to the number of times people click on an ad, according to MikMak.
Even before that, the number was increasing. Twitter’s media traffic grew 56.3% from July 1 to September 30 and 326% from April 1 to June 30.
“We were actually seeing an increase in Twitter traffic,” says Tipograph. “As soon as Elon Musk’s potential ownership became more imminent, we saw a significant shift in traffic.”
Whatever technology and business improvements were taking place will be difficult to sustain, as Twitter has made massive layoffs in its global marketing team, whose responsibilities include reporting and metrics on ad performance, CNBC reported.
‘Give me $8 now’
Musk has focused his attention on subscriptions as the key to Twitter’s financial revival. He created an $8 per month offer that allowed people to “verify” and gain premium features. Critics have been so vocal that on Monday Musk tweeted a photo of a T-shirt saying, “Your feedback is appreciated. Give $8 now.”
Musk has previously indicated that he wants to transform Twitter into a so-called super app similar to China’s WeChat, which people can use to chat with friends, watch movies and buy products.
Still, he will need partners who want to work with him. And Jeanine Turner, a professor in Georgetown University’s communication, culture and technology program, said her aggressive stance toward companies that have posted ads on the site doesn’t look good as she pursues other partnerships.
“I think the big issue for him will be trust,” Turner said. “I don’t see people trusting him with all this information.”
For advertisers, many brands don’t consider Twitter an essential means of distribution given its less sophisticated ad-tracking technology and targeting capabilities. Other opportunities are emerging, such as connected TV and streaming services as well Amazon’s Online advertising business for retail-based companies is booming, Tipograph said.
Jessica Gonzalez, co-CEO of the nonprofit group Free Press, was unimpressed by Musk’s animosity. Gonzalez was one of the civil rights leaders who spoke with Musk last week, expressing concern about the rise of hate speech against black and Jewish groups on Twitter. This is the same group that was urging advertisers to stop their campaigns.
Gonzalez said he was willing to give Musk the “benefit of the doubt” when he told the group that Twitter was connected to them. But between the rhetoric he’s after and cutting half his staff, he has serious doubts about whether it’s worth trying to work with him.
Asked if he would have another meeting with Musk to discuss Twitter’s approach to offensive content, he said, “I don’t know.”
“Just because he made some promises in that meeting and then two days later went back on them,” Gonzalez said.
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