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Media Planning and Buying Media Twitter

Can Elon Musk’s Twitter win back advertisers’ trust?

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By John McCarthy, Opinion editor

January 31, 2023 | 11 min read

Elon Musk’s Twitter ‘damaging’ leadership prompted advertisers to urgently suspend ad spend on the social network. Months later, media buyers remain unimpressed with its efforts to win them back.

Media buyers

Ad agencies finally break their silence on the big Tweet retreat

Before Elon Musk acquired Twitter, 90% of its revenue came from advertising. Musk then bet the house on users loving the app as much as he did (to the tune of $44bn). Staff who survived the first mass redundancy cobbled together a self-verification product to monetize heavy users which, among other problems, was hijacked to create spoof accounts for the biggest brands on the platform.

In November 2022, a leaked memo from IPG, and a person in Reuters familiar with the matter at Omnicom, indicated a wider trend: that the world’s top advertising agencies had fallen out of love with the social network. A precipitous fall in ad revenue followed.

Data from the Standard Media Index (SMI) suggests that ad spend on Twitter dropped by 71% in December year on year. November was just down 55%. Another report claimed that 14 of Twitter’s top 30 advertisers ceased all advertising activities soon after several days of users impersonating brands. Four more top advertisers reduced spending between 92% and 98.7%.

Since that first wave of budget suspensions, top advertising agencies seem reluctant to change course. The pause may be permanent. Here’s what media buyers tell The Drum.

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The big tweet retreat

A social media leader at one of the world’s largest media agencies said when Musk first took over the platform, it was “business as usual” for clients. But concern quickly grew as entire departments were sent packing and tweets from the new CEO hinted at sweeping changes.

Another top media exec said his team was “surprised how many clients hadn’t paused or stopped” during the first wave of chaos. Sports and gaming clients stuck with the platform and for most other clients, Twitter simply wasn’t a “priority platform”.

Functionality was “slightly affected” and the reduced demand for inventory generally made the CPMs “lower than normal”.

The “turning point”, according to one buyer, was November 10, 2022. Hours after Musk rushed out paid verification, literally any user with a credit card could mimic a verified brand on the platform and inflict reputational damage. While users were laughing their way through an almost apocalyptic feed, marketers were at panic stations.

“There was a lot of abuse towards brands. Not enough has been done to show that brand safety concerns from brands and agencies should be taken seriously," said one media exec.

Since then, Twitter has signed deals with third-party brand safety companies DoubleVerify and IAS. It recently had a lot of these capabilities in-house. But buyers have noticed a deterioration in service.

“Ad platforms used to have a lot of glitches but in the last three years, I’ve rarely seen a glitch that had a real impact on a campaign. This changed on Twitter at the end of November. A lot of [Twitter’s] reps left as well, we were concerned that if something did happen, there wouldn’t be enough support.”

Another common element across numerous conversations with media buyers is that Twitter had “respected” account managers. Their absence is noticeable. As per online magazine Slate, “emails have been falling into the abyss”. One buyer says Musk has actively “damaged” Twitter with all the redundancies, cutting the company by 80% to 1,300 people.

One marketer asked why they should make a long-term commitment to a platform that won’t even pay the rent on its offices.

Monetization priorities

Advertisers pay a premium to reach real people in spaces that are unlikely to damage brand reputation. Twitter, with some caveats, was generally seen as safe. Since Musk’s takeover top users and celebrities have fled, citing an increase in hate speech and disinformation, while some reports suggest there has been an uptick in racial and homophobic slurs.

“It’s [now] hard to verify what the actual state of play is,” admitted one social exec at a top media agency. “It’s difficult to understand what is hearsay and what is factual when it comes to things like increased hate speech or lack of content moderation.”

Musk’s rush to reinstate users banned for hate speech (Kanye West and Nick Fuentes, for example) didn’t help make his case to concerned CMOs who remain concerned the site is once again becoming a haven for hate speech.

“If the environment is not safe for users or brands, then we leave. We need to be mindful of where our clients’ ads are appearing,” said the social exec.

But with Musk aiming to have 50% of revenue generated from subscriptions, appeasing advertisers is no longer a priority. He has already said advertisers are steered by “leftist groups”, rebuked some that have pulled spend, and threatened to name and shame others. He has clashed with a top voice in brand safety and, just days ago, promised users an ad-free subscription tier that would diminish the potential scale of the platform.

Reflecting on this, one buyer said: “Advertisers are wondering whether the platform will serve the same needs as before for clients?”

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Is Twitter still relevant?

Many buyers and strategists acknowledge that Twitter’s relevance as a product was likely waning – perhaps explaining Elon's expedited rush into user revenue.

Brendan Ashe, global activation partner at media agency Wavemaker said: “The Twitter Ads offering has never been particularly strong in relation to Meta. In a lot of ways, it has benefited from a lack of other viable options in the paid social space. The social landscape has never been as vibrant and competitive as it is now, and that trend is only going to continue.”

With CMOs reviewing marketing budgets to find cuts amid the cost-of-living crisis, experts said many will adopt a use-it-or-lose-it mentality. TikTok, Snapchat, Reddit, Pinterest, Twitch, YouTube Shorts and even BeReal are all offering products that could feasibly replace any spend that had previously been directed at Twitter.

“News around the Musk acquisition probably just sped up a trend we were going to see anyway – advertisers were going to invest budget in other platforms that are offering better advertising solutions,” said Ashe.

Mobbie Nazir, global chief strategy officer of We Are Social, said she’s seen mixed signals. “Clients, where Twitter was not a huge part of the overall social media spend, are therefore easier to shift budgets. Where spend moved to other platforms, Instagram and TikTok have been the key beneficiaries.“

Meanwhile, Michael Chadwick, head of strategy and experience at Cheil UK, agreed the social space is particularly rocky right now. “The old guard is wobbling and you have new emerging channels growing at pace. When the social landscape felt much more stable – there is a possibility that Twitter may have recovered more solidly from this period of change, in part because advertisers may have felt there were fewer places to move to.”

Chadwick concludes: “If there is less certainty that the established players will deliver the numbers I want, there is less risk in experimenting and trialing the new.”

From retreat to retweet

All is not lost for Twitter but Wavemaker’s Ashe admits it now has a “mountain to climb” but it can be scaled. Agency execs offered advice for the platform:

  • Provide a better return on ad spend – don’t lose focus on the product.

  • Ease the brand reputation issues that are giving investors additional headaches.

  • Hand over the reigns of the business to another CEO. (He’s trying to.)

  • Stop acting like a start-up that launches products ad-hoc. Twitter is an established company, do the due diligence.

  • Hire a comms team to manage negative press and answer queries.

  • Explain what Twitter is actually supposed to achieve for brands in 2023.

  • Show investors that serious steps are being taken to tackle concerns the business is shirking civic duties on hate speech and mis/disinformation.

  • Create a fame-driving ad campaign to combat the toxic opinions about the platform.

It’s a lot to ask.

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