Will Elon Musk Be Able to Keep Twitter’s Advertisers Happy?

Almost exactly three years before Elon Musk finalized his purchase of Twitter this week, he tweeted his thoughts on the platform’s primary financial engine: “I hate advertising.”

On Thursday, Mr. Musk extended a truce of sorts to Twitter’s advertisers, saying in a tweet that he aims to make Twitter “the most respected advertising platform in the world.”

He explained that he bought the company “because it is important to the future of civilization to have a common digital town square” and because he feared that social media was in danger of splintering into echo chambers “that generate more hate and divide our society.”

He sought to ease Madison Avenue’s fears about brand safety — that their ads could appear next to distasteful content and be soiled by association — by stressing that “Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!” Without making any promises about content moderation, which many advertising trade groups have encouraged in recent years, Mr. Musk promised a platform that followed government regulations and was “warm and welcoming to all.”

Bob Hoffman, the advertising industry veteran behind the Ad Contrarian newsletter said in an email that advertisers were unclear which Musk — the free-speech absolutist or the savvy businessman — was now at the helm.

“If it’s the ‘free-speech absolutist,’ he’s in big trouble,” he wrote. “If Twitter becomes the go-to platform for the knucklehead brigade, advertisers will run, not walk.”

Mr. Hoffman noted that, while many companies felt that they had to advertise on Facebook, Instagram and TikTok, few felt the same for Twitter.


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“Twitter occupies a different place in the social media pantheon,” he said. “This is a difficult position to be in because any reason to bail is reason enough.”

General Motors, a competitor to Mr. Musk’s electric vehicle business Tesla, said in a statement on Friday that it would suspend its advertising on Twitter but continue to use the platform to interact with users.

“We are engaging with Twitter to understand the direction of the platform under their new ownership,” the company said. “As is normal course of business with a significant change in a media platform, we have temporarily paused our paid advertising.”

Even before Mr. Musk began pursuing Twitter, many advertising executives complained that the company’s ability to target ads trailed that of competitors like Facebook, Google and Amazon. Many had said they would consider moving their business elsewhere if Mr. Musk’s permissive attitude toward free speech risked putting their campaigns in proximity to hate speech and conspiracy theories.

Two advertising executives, who spoke on the condition of anonymity because they were not authorized to discuss potential plans, said some clients had indicated that they would pause business with Twitter in order to evaluate their options while others are considering leaving the platform entirely if former President Donald J. Trump were allowed to resume tweeting. Mr. Trump’s Twitter account was suspended after the Jan. 6, 2021, attack on the Capitol.

Arun Kumar, the chief data and technology officer at the ad giant IPG, said Mr. Musk’s message to advertisers made it clear that he did not want them to leave Twitter.

“The attitude is more or less just wait and watch,” Mr. Kumar said of clients. “Advertisers still share the same concerns around content moderation that existed before, and, given the economic environment right now, any missteps and there will be quick reactions.”

Twitter’s advertising sales, which make up more than 90 percent of its total revenue, have been on the upswing, totaling $2.18 billion in the first half of the year (revenue sources like subscriptions have been declining). The top five advertisers this year on the platform — HBO, Mondelez, Amazon, IBM and PepsiCo — spent more than $155 million through this week, according to estimates from the advertising analytics platform Pathmatics.

HBO said in a statement that it “will be assessing the platform under its new leadership” and that it will “determine appropriate next steps.” The other companies did not immediately provide comment on Mr. Musk’s ownership of Twitter.

source: nytimes.com