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After Elon Musk’s antics on Twitter, advertisers might think twice for now

After Elon Musk's antics on Twitter, advertisers might think twice for now
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new York
CNN business

Hours before word broke Thursday that he had it completed its $44 billion acquisition from Twitter, Elon Musk wrote an open letter to advertisers, who stress that he doesn’t want the platform to become a “free hellscape.”

But that attempt to appease the advertising industry, which makes up the bulk of Twitter’s business, was quickly overshadowed by Musk’s early days as the platform’s new owner. Some industry experts are now predicting that an exodus of advertisers could come sooner than expected.

Within the first 24 hours of his possession there were several reports that racist comments, hate speech, and other objectionable content on Twitter had increased significantly as users tested Musk’s promise that he would allow “free speech” on the platform. Musk was widely criticized over the weekend to tweet (and then deleted without reason) a link to a fringe conspiracy theory about the violent attack on Paul Pelosi, husband of House Speaker Nancy Pelosi.

“I think advertisers are preparing to leave,” said Claire Atkin, co-founder of adtech watchdog Check My Ads. “It’s very likely a seismic shift for marketers and advertisers.”

After months of uncertainty about Musk’s upcoming acquisition, advertisers must now grapple with how Musk will transform the platform, which already has a presence in the digital advertising space despite its outsized political clout. Known as both an innovative entrepreneur and an unpredictable figure, Musk has promised to reconsider Twitter’s content moderation policies and reverse permanent bans on controversial figures, including former President Donald Trump.

Brands have long been sensitive to the types of content their ads are showing for, an issue made even more complicated by social media. Most marketers balk at the thought of having their ads appear alongside toxic content such as hate speech, pornography, or misinformation. And if Twitter continues to struggle with a surge in such content — or if Musk updates Twitter’s policies to specifically allow some of it — companies could stop advertising there for fear of risk to their brands or because they’re regularly reaching smaller audiences users leave too.

“When you think of the money, the investment, and the care, the real care and attention that goes into connecting with consumers, and then having your ad published alongside lies… it goes against everything a brand does.” would like to,” said Atkin.

Musk, previously tweeted “I hate ads” and indicated that he wants to make the platform more independent of them, but also faces the reality that about 90% of Twitter’s revenue comes from advertising. In addition to the open letter to advertisers, Musk’s team spent Monday “meeting with the marketing and advertising community” in New York. after Jason Calacanisa member of Musk’s inner circle.

In public and private discussions with advertisers, Twitter has also stressed that its content policies haven’t changed after the acquisition, and Musk has said They will not change until a new content moderation board is appointed (apparently to replace the company’s existing Trust and Safety Council).

But Musk may face an uphill battle. Twitter’s digital advertising business is much smaller than that of Meta, Google, and Amazon, and doesn’t have the growth and user demographics of TikTok. And many brands already have reduced digital advertising spend in recent months amid the economic downturn. It might not take much for brands to keep cutting back.

General Motors

(GM)
that competes with Musk’s Tesla

(TSLA)
, said on Friday it would pause payment for advertising on Twitter while it evaluates “Twitter’s new direction.” CNN contacted more than a dozen other brands advertising on Twitter Monday, most of whom have not responded. Toyota

(TM)
another Tesla

(TSLA)
Competitor, CNN said it was “in talks with key stakeholders and monitoring the situation” on Twitter. Ben & Jerry’s said that “at this point we had no thought of taking any action”.

On Monday, the Global Alliance of Responsible Media, a leading consortium of advertisers and platforms including Twitter, published an open letter to Musk and encouraged him to ensure that Twitter continues to adhere to the group’s standards, which call hate speech, violence, harassment and insensitive treatment of debated social issues “not eligible for any advertising support.” In response to the letter, Musk said in a tweet, “Twitter’s commitment to brand safety remains unchanged,” and Twitter Chief Customer Officer Sarah Personette added that the company takes brand safety and its partnership with the organization seriously. (This is what Personette tweeted on Tuesday she quit from the company last week.)

Also on Monday, Media Watchdog Media Matters for America CEO Angelo Carusone tweeted, urging major Twitter advertisers to “put pressure on Twitter now” to better counter the rise of hate and other toxic content. On Tuesday, a group of more than 40 civil society organizations including Media Matters, the NAACP, GLAAD and the Center for Countering Digital Hate sent one open letter to Twitter’s top advertisers, who are urging them to stop advertising on the platform if Musk limits content moderation.

“Advertisers are very sensitive to the changing landscape of social media,” Atkin said, adding that the question for Twitter now is “whether Elon Musk can continue to instill confidence with advertisers, or does he continue to sow uncertainty and fear.”

In response to a request for comment on the story, a Twitter representative for CNN referred to Musk and Personette’s previous tweets and Musk’s letter to advertisers, as well as a tweet from Twitter’s Head of Safety and Integrity, Yoel Roth, noting that that the platform’s policies had not changed, although there has been a surge in hate content from mostly non-human accounts.

In a separate tweet thread on Monday, Roth said that since Saturday the company has been “focused on addressing the spike in hateful behavior on Twitter.” He added, “We’ve made measurable progress, removing more than 1500 accounts and reducing impressions for this content to near zero.”

An ad executive told CNN Monday that dozens of their clients have sought advice on the situation over the past few days.

“It seems like an appropriate time for advertisers to rethink things,” said David Karpf, associate professor in George Washington University’s School of Media and Public Affairs. “I think advertisers are going to look at this and say, is Twitter’s underperforming product going to be a better investment or a worse investment? And it’s going to be the same or a little bit worse… Advertisers are certainly not going to be spending more money on Twitter any time soon.”

There are precedents for advertisers withdrawing from platforms because of hateful content. In 2020, dozens of brands have publicly registered with the Advertiser Boycott #StopHateForProfit by Facebook, which denounced the platform for its “repeated failure to meaningfully address the massive spread of hate on its platforms.”

But when it comes to Twitter, brands may need to tread carefully to avoid backlash. After GM announced its Twitter ad break, some users of the platform, including some right-wing politicians, have called for a boycott of the automaker.

Because Musk has positioned himself as a “free speech” maximalist and has strong support from many conservative politicians, brands risk being labeled anti-free speech opponents if they leave the platform. But brands also run the risk of implicitly supporting hate speech and other harmful content if they stay, meaning many could choose to quietly stop advertising on the site without formal notice.

“Advertisers find it difficult to publicly weigh what is an unwinnable position,” the ad executive told CNN.

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