Advertisers grapple with Musk’s ownership of Twitter
By Abimbola Mohammed
Following the announcement made by the new owner of Twitter, Elon Musk, to introduce a new policy on how the platform will run on $20 payment on verified accounts, advertisers are beginning to rethink their advertising budget on the bird app.
Advertisers who provide 90% of Twitter’s revenue are increasingly grappling with Musk’s ownership of the platform. The reaction is also as a result of the decision to loosen Twitter’s content rules, which could lead to a surge in misinformation and other toxic content.
IPG, one of the world’s largest advertising companies with more than $9 billion in net revenue last year, issued a recommendation recently through its media agencies for clients to temporarily pause their spending on Twitter because of moderation concerns.
IPG is a holding company with several agencies handling advertising spends; it has clients such as American Express, Coca-Cola, Johnson & Johnson, Mattel and Spotify. Its Mediabrands division manages roughly $40 billion in marketing investment globally.
The Global Alliance for Responsible Media, a coalition of platforms, advertisers and industry groups that is fighting harmful content on social media, also said that it was monitoring how Twitter planned to deal with content moderation.
In the same vein, General Motors, which is a competitor of Musk’s electric vehicle company Tesla, also announced last week that it has temporarily suspended its advertising on Twitter.
According to a report, the billionaire Musk, who is meeting advertising executives in New York this week, has spooked some advertisers, promising to loosen Twitter’s content rules, which could lead to a surge in misinformation and other toxic content.
Twitter has been in disarray as the company adjusts to a new reality under Musk, who closed his $44 billion buyout of the firm last week. Musk immediately fired Sarah Personette, the chief customer officer who managed the company’s relationships with advertisers; Dalana Brand, the head of people and diversity; and Nick Caldwell, the executive responsible for core technologies like infrastructure before moving quickly to install close confidants and trusted engineers from his other companies at the social media firm.
Since then, Musk and his advisers have been working on product changes and major cuts to Twitter’s rank and file. Managers at Twitter, which has about 7,500 employees, have said they are finalizing lists of high and low performing workers, most likely with an eye toward layoffs. While several employees have already been let go, the timing and scope of mass layoffs remains fluid.
After a writer, Stephen King tweeted on Monday that he would leave the platform if the $20 plan was implemented, Musk responded on Tuesday that, “we need to pay the bills somehow! Twitter cannot rely entirely on advertisers. How about $8?”
Musk later tweeted that he would adjust the price of Twitter Blue to $8 per month. “Power to the people!” he wrote.
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