Twitter forces advertisers to pay up – industry analysts say it’s an ‘utter shit show’

The change comes after months of declining ad revenue for the platform following Musk’s November acquisition of the site – many major advertisers have suspended investments over brand safety concerns. In fact, as of February, over 50% of Twitter’s top thousand advertisers prior to Musk’s buyout have stopped advertising on the site, according to data from digital marketing research firm Pathmatics.

And although Musk has bet most of his chips on making subscriptions a more central pillar of the business model, he likely still needs advertisers – especially considering that the revenue fallout is not yet complete. In fact, Twitter’s ad revenue is still projected to drop 27.9% this year, per data from Insider Intelligence.

But social media strategists and analysts believe the new subscription requirement for advertisers was made too hastily – and will ultimately cost Twitter.

“It’s absolutely bonkers and exactly what we’ve come to expect from Elon Musk: the poorly executed, ill-timed, badly judged implementation of something without any proper warning,” says Matt Navarra, a leading social media consultant.

The announcement, he argues, is “missing key information” and has led to some “confusion around the removal of [verification checkmarks] unless you spend [$1,000] dollars on advertising.”

And he’s right: users took to Twitter Friday to voice their bewilderment, and Navarra himself flagged on Twitter that a number of gold checkmarks – which indicate that an account is subscribed to Twitter’s Verified Organizations service – had already disappeared. Among them are Google Maps, BBC’s breaking news account and TikTok’s UK account.

Before you buy ads on Twitter, you need to spend $8 on a blue check is the very definition of penny wise and pound foolish.

Every advertiser is already spending more than $8. Why chase after pennies from them? https://t.co/ZQkbXycCHj

— Dare Obasanjo (@Carnage4Life) April 21, 2023

Brands and ad agencies are scrambling to keep up at this point, Navarra says. “I have big brands, social media managers and agency bosses, messaging and DMing me, telling me how they just looked at their accounts … and suddenly realized their gold checks were removed or that there's this new rule in place,” he says. “They’re now scrambling to find out if their clients want to do anything about the fact that their accounts are now more vulnerable and at risk of impersonation today. Do they want to spend the money to sort that out? Brands are just a bit dumbfounded, really.”

Beyond the general sense of confusion surrounding the announcement, the change could also create hurdles for small- to medium-sized businesses that don’t spend enough to meet the threshold, Navarra says. This should be a salient concern for Musk considering that many smaller brands began advertising on Twitter in place of larger brands like Coca-Cola, Ford and Unilever, which stopped spending on the platform.

But perhaps that’s Musk’s objective here. “It could weed out some of the smaller and lesser-known advertisers that are taking up some of the spots left from the exodus of big brands,” says Jasmine Enberg, a principal analyst at Insider Intelligence’s eMarketer specializing in social media. “Many of those companies can’t or aren’t willing to pay $1,000 a month for verification, and it could decrease the amount of shady or low-quality ads on the platform.”

But at the same time, the move could inhibit new players from joining in. “This adds a barrier to entry to any business who had hoped to simply test Twitter advertising with a relatively low budget before investing in larger amounts,” says Mike Allton, a social media influencer and head of strategic partnerships at social media management platform Agorapulse. “While the expense of verification is low, again, the message this requirement sends could be a massive deterrent to brands who might, one day, have exceeded that amount of ad spend.”

What's more, Musk won't easily woo his lost spenders, Enberg predicts. “It won’t do much to encourage big brands who have reduced or stopped spending on the platform. There’s little incentive for brands that aren't already spending over $1,000 per month to pay for play. Budgets are still tight and Twitter isn’t a strong performance driver, so the cost-benefit isn’t there.

Ultimately, the decision to require advertisers to subscribe to Twitter Blue or Verified Organizations won’t do Twitter’s bottom line any good, Enberg says. “Given the dismal state of Twitter's ad business, you’d think Musk would want to entice advertisers to spend more, rather than stop some from spending at all.”

It‘s not a development that looks good to advertisers or to everyday users, Allton says. “The optics here are once again very poor for a network already struggling to maintain any sense of validity or trust.”

Navarra goes so far as to say that the decision is likely nothing more than a money grab. “It’s another ball out of the blue that's led to chaos and confusion, put brands at risk and is really just a way to force people to take up a product that they don't need and don't want – to line the pockets of Elon Musk or to help him pay off the debt that he took on with buying Twitter.”

He went on, saying: “It’s a complete and utter shit show.”

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