Twitter's top advertisers have pulled out of the platform

https://www.businessinsider.com/twitter-lost-half-top-advertisers-elon-musk-takeover-report-2022-11

by mhoad • 4 years ago

45 48 4 years ago

businessinsider.com

lupire• 4 years ago

Actual headline:

50 of Twitter's top 100 advertisers have pulled out of the platform since Elon Musk took over, report says

Half of Twitter's top 100 advertisers have stopped promoting on the platform, per Media Matters.

Since 2020, those 50 companies have spent $2 billion on Twitter advertising.

----

So that's ~$300M drop in annual spend.

AzzieElbab• 4 years ago

Still pretty good damage largely done by media matters themselves. They are a doxing org that petitioned to advertisers to drop twitter. Impressive.

memish4• 4 years ago

These companies aren't making independent decisions on this. Here is how the system works.

A large coalition of political/social activist groups agreed not to try to kill Twitter by starving us of advertising revenue if I agreed to this condition. They broke the deal.

https://twitter.com/elonmusk/status/1595196519598080000

This group of activists have a lot of power to enforce their agenda wrapped in a cloak of "safety standards", which is defined however they want. They pressure companies to fall in line.

Jessica González, co-CEO of Free Press, said the meeting with Musk “seemed productive” but she is not “encouraged enough” to pull back on the campaign that civil rights groups launched asking advertisers to suspend their ads on Twitter if Musk doesn’t commit to enforcing safety standards.
“I think we need to keep the pressure on and make sure that his actions meet his words,” González told The Hill.
Musk met with the groups after Free Press and Media Matters led nearly 50 civil society groups in a letter Tuesday calling for Twitter’s top 20 advertisers to pull their ads if he didn’t enforce safety standards. Advertising giant IPG later reportedly issued a recommendation to its clients, which include Johnson and Johnson, Coca Cola and American Express, to pause paid advertising on Twitter.

https://thehill.com/policy/technology/3717711-civil-rights-g...

Elon was initially playing ball with them, as most companies do because they are afraid of the consequences. He announced the council, they weren't satisfied, and he said screw it, I'll deal with the consequences.

rurp• 4 years ago

Poor Elon, always the victim :(

If Elon and his fans can't see why advertisers would be concerned about his actions Twitter really is toast as a sustainable business.

jyxent2• 4 years ago

Musk has a history of not being trustworthy. The smart thing to do here is to wait and see if he changes his mind on a whim.

memish4• 4 years ago

Is The Hill making up those quotes?

x0x02• 4 years ago

This is pure nonsense.

Some activists have certainly asked advertisers to pause. They've done so before, and will do so again. If the ad product is great, the advertisers will largely ignore them.

The reality is Twitter has never been a good ad platform (recently: $5B-ish from ads, vs Google's $210B or Facebooks > $100B, numbers off the top of my head but reasonably accurate), they've never commanded premium rates, etc. Brands are very sensitive to not appearing next to the hateful content that Musk is not just allowing but high fiving (eg open anti-semitism from Kanye, etc). Ads, for everything but the best platforms (Google and FB) are also a relationship business. Musk has shown he's very unreliable, fired the people with the relationships, driven out the people running Trust and Safety, and generally been a terrible partner. Twitter's ads platform has also been buggy and is even buggier now (see recent reports of paused/stopped campaign reactivation, many multiple years old.)

Additionally, Twitter's business has been swimming against long-term trends in the ads marketplace related to privacy and data movement.

Twitter isn't much more than commodity pageviews that can easily be sourced elsewhere, from more reliable partners with way less brand safety risk. Musk has also made Twitter an unreliable partner and doing business with them very difficult -- see repeated reports of agencies / brands unable to even contact their CSMs. And without an idiot allowing rampant impersonalization of brands (Nintendo verified account w/ Mario flipping the bird, Eli Lilly verified account saying Insulin is free, etc etc) with no apparent plan to stop that.

x0x02• 4 years ago

Additionally: Twitter's trust and safety team flagged multiple p0/p1 risks on the twitter blue verification (revolving around impersonation) that nearly instantly played out. Musk ignored them and yolo'd the product out. As an advertiser, but also as a business partner, this simply isn't the behavior you're looking for in a business partner. Bad enough to miss the risks, but for the ceo to blow them off...

Doing business with Twitter now means constantly being ready to react to whatever dumb stuff Musk decides to do despite multiple people (that he has a habit of firing) warning him about. I would probably prepared to suck it up and deal if it were Google or FB, but not for Twitter.

gloryjulio• 4 years ago

I didn't believe initially that a person like Elon would not understand how ads business work. Let's see how this round of f around and find out pans out.

cmh892• 4 years ago

Is there a source other than Musk, who has been known to lie in the past?

riotnrrd• 4 years ago

There are other sources on the record, but they contradict Musk's claim. Block quote from an Ars Technica article[1]:

Some activists who attended the meeting tweeted to confirm that they never made such a deal with Musk, including Free Press co-CEO Jessica Gonzalez, who helped drive a #StopToxicTwitter coalition pressuring Twitter's top 20 advertisers to boycott the platform.

“Not sure who Musk is talking about here, but I met with him a few weeks ago with civil rights leaders, and I also co-lead the #StopToxicTwitter coalition that is calling on advertisers to pause ads until he rights the ship,” Gonzalez tweeted. “I never made any such deal.”

NAACP President Derrick Johnson backed Gonzalez in his own tweet denying activists made a deal with Musk.

“We would never make such a deal,” Johnson tweeted. “Democracy always comes first. The decisions being made at Twitter are dangerous, and it is our duty, as it has been since our founding, to speak out against threats to our democracy. Hate speech and violent conspiracies can have no safe harbor.”

[1] https://arstechnica.com/tech-policy/2022/11/musk-breaks-prom...

malshe• 4 years ago

He announced the council

I take that you are referring to the content moderation council (https://twitter.com/elonmusk/status/1586059953311137792). I don't think he formed it though. And note that he never meant it anyways as he has been reinstating banned accounts without any council in place. In case of Trump's reinstatement, he even did an online Twitter poll.

saurik• 4 years ago

Are you sure of the timeline there? Despite everyone assuming he would do that immediately, he didn't do it until only a few days ago, which I would have thought actually jives with his story that he wasn't going to do such things until the council was formed... except then the other side defected before then, and so he might feel justified in being able to (finally) go ahead. (I am myself NOT sure of the timeline, I will say explicitly; but, it at least casually seems to "check out".)

dragonwriter2• 4 years ago

A large coalition of political/social activist groups agreed not to try to kill Twitter by starving us of advertising revenue if I agreed to this condition. They broke the deal.

As with the Russian claims about a deal for NATO to permanently not expand in Eastern Europe, this is easy to show is unlikely to be true:

(1) In either case, these are things that would be recognized of utmost significance by all sides.

(2) In either case, the allegedly aggrieved parties (or their relevant predecessors in interests) were sophisticated actors, long used to working in an environment where durable binding agreements, particularly ones of great significance, were memorialized in writing affirmed by all parties, with copies retained by all parties, to assure that the terms are clear, fixed, and that evidence can be produced of them in the event of any public or private dispute.

(3) In neither case can the allegedly aggrieved party produce the writing memorializing the agreement, or any explanation as to why they (or their predecessor in interest) would not, as a condition for what they were giving up in the agreement, insist upon the common step of memorializing the agreement in writing,

(4) Therefore, it is highly improbable that the narrative of the aggrieved party is accurate.

somenameforme• 4 years ago

In the case of NATO it's even easier to show that it is true: https://www.spiegel.de/international/world/nato-s-eastward-e...

"After speaking with many of those involved and examining previously classified British and German documents in detail, SPIEGEL has concluded that there was no doubt that the West did everything it could to give the Soviets the impression that NATO membership was out of the question for countries like Poland, Hungary or Czechoslovakia."

summerlight2• 4 years ago

These companies aren't making independent decisions on this. Here is how the system works.

I don't think you have enough expertise on digital ads these days. Allocation and execution of advertising budget is a highly data driven process. Those activists cannot really make any dents if a platform can deliver consistent, predictable and high performances. But nowadays no one thinks the word "predictable" accurately describes the status quo of Twitter so many advertisers pulled their budget to avoid hassles.

Still the platform is supposed to be performing well thanks to how digital auction works. Big budgets are gone, less competitions on the auction so you're supposed to get more slots at lower costs, right? In this case, the loss should be minimal and advertisers will quickly return. But the problem is that its advertising platform is not working smoothly as before. Its ads frequency has increased significantly (1 per 5 tweets recently), which is a usual playbook for advertising networks when it needs to quickly cover significant performance loss. And Twitter was known to be one of the weakest advertising networks and it's even demonstrating a weaker performance.

Okay, it might not be that problem if Elon is willing to fix all the issues. And Elon is known to be a prominent hater of digital ads and has explicitly expressed that he wants to move the major revenue stream to other products (like Twitter Blue), so it's fairly natural to conclude that its investments on advertising will deteriorate even in the longer term. I don't see any reasons for advertisers to remain on platform. Stop blaming those "activists" or whatever you (and Elon) don't like. This is a conscious decision made by Elon, he just didn't know the consequence.

memish4• 4 years ago

The companies were advertising on Twitter, despite the relatively weak performance.

They considered it worth the spend prior to activist pressure.

If Twitter's ad performance was best in class, they would be less likely to fold.

We seem to be in agreement about how this works?

papito• 4 years ago

This is typical Conservative victimhood. These "activists" and their "agenda" are out to cancel a rich man because he is more successful than them.

Or.. something.

Or maybe it's just, you know, shocking incompetence and being surprised at the consequences of being a tool.

BulgarianIdiot• 4 years ago

There's no "large coalition of political/social activist groups" that control ad revenue. You need to see through Elon's spin, he's trying to shift the blame for his own failures.

We have a set of independent private companies making decisions in the interest of their brand and performance.

The "coalitions" they're in are several large ad agencies many of them participate in, but it's the job of those ad agencies to know where it's safe to run ads and where it's not. They're not political, not social, and not activists. They're advertising professionals.

SilverBirch• 4 years ago

Once again I think this is going to be a matter of the left wing going "Well, I mean... that's what you get in capitalism when you turn your product into a tool to humiliate your own advertisers". And the right wing going "Oh my god these left wing social activists like... American Express, and these left wing reporters like... Associated Press are attacking Elon because he supports freedom!".

I guess it's up for each of us individually to make a judgement about which side is right.

codekansas• 4 years ago

I find it strange that stopping advertising on some particular platform is a "big deal". It feels like it might have been so when ads were run in newspapers and on TV, but regularly adjusting your advertising strategy to be able to check its efficacy seems like common sense in today's internet advertising world. Given that the script for these companies is basically interchangeable among whichever internet platform, it probably takes a couple hours to spin up or spin down an ad campaign. Can't help but think that smart actors just use these events as cover / PR for evaluating their ad efficacy.

ivraatiems• 4 years ago

It's certainly in Elon Musk's interest to cast this as the actions of a cabal of politically-motivated figures. I think the reality is that if you look at Twitter as a platform under his 'leadership'... well, who'd want to advertise on it now?

Musk is doing everything he can to drive away big corporations who enjoy reliability. He's summarily fired >66% of the workforce. He's implemented seemingly random policy changes, none of which have worked, many of which resulted in immediate obvious damage to the brand image of said advertisers. None of the things he has promised to do which advertisers might like have happened, and on several, he's reneged without explaining why.

What large corporation trying to remain politically neutral-ish* while appeasing a wide base of customers wants any part of this?

* Politically neutral-ish in my view means "so anodyne and vague in our behavior that moderate people of the left and right both think we're with them, and extremists from either side can be ignored."

HWR_143• 4 years ago

Indeed. Some of those companies value their brands at more than what Elon spent on Twitter. It seems reasonable to me that they would hesitate to risk appearing next to divisive political content.

godshatter• 4 years ago

Does Twitter need those specific advertisers more than they need Twitter? The ones that remain that couldn't quite make the list will become their new "top advertisers" and reap the benefits. I doubt they are in any danger of running out of companies that want to advertise on their service.

I don't really care about Musk or Twitter, but I'm hoping this whole debacle will result in less reliance on advertising for services like these. It's already resulted in more interest in the fediverse.

mhoad4• 4 years ago

It’s clear you don’t work in marketing or advertising from this comment (not a criticism just a neutral observation) but I have for the past ten years.

I couldn’t even begin to describe the power imbalance here. Twitter need them much more than they need Twitter. It’s not even close.

autotune• 4 years ago

Depends how much more money melon plans to burn on Twitter and for how long.

dragontamer• 4 years ago

Twitter isn't even a top 10 social media site, let alone a top 10 advertiser (which includes major publications like network television: CNBC, ABC, Fox, and the like... Sports Stadiums, Billboards, etc. etc.)

Like, what advertisements on Social Media actually get things done? Google Adsense, Facebook, Amazon, Youtube, Twitch, TikTok, Instagram, Apple Play store, Google Play store. Etc. etc.

Yeah, a lot of repeats (Google, Youtube, Google Play. Amazon/Twitch, etc. etc.), but the big advertisers have multiple locations that really draw a lot of eyeballs. Twitch is _TINY_ compared to everyone else.

--------

Advertisers are also super worried about the (possible) upcoming recession and are cutting advertising dollars significantly. There was a chance Twitter was always somewhat doomed, but actively pissing off the Advertiser base and accelerating the Advertiser exodus certainly doesn't help.

Twitter has gone from "Small advertiser" into "actively hostile advertiser". Twitter was always going to lose a chunk of ad revenue in this economic time, but now they're skyrocketing to the top of the list of ad-partners to cut.

HWR_143• 4 years ago

Does Twitter need those specific advertisers...

I guess Twitter doesn't need these specific advertisers, but there isn't much out there to replace them. The companies leaving have huge marketing budgets, and I'm not even sure if it's possible to build a list of new companies with a combined marketing spend equal to them willing to do business with Twitter. Heck, just making a list of companies with an equal combined marketing spend is tricky.

... more than they need Twitter

Certainly Twitter needs them more. Those brands advertise with the current world cup, on TV, Meta, all over the place. They have a lot of advertising dollars and a lot of places to sink them.

Like, Summer of 2024, Twitter usage will be driven by the Olympics. Coca-Cola will have a bigger presence at the Olympics than Twitter will.

The ones that remain that couldn't quite make the list will become their new "top advertisers" and reap the benefits.

Yes. It is good for the people still advertising on Twitter. They will give Twitter no more money yet become a bigger % of Twitters ad revenue and can probably demand more ad views. This is not good for Twitter itself.

I doubt they are in any danger of running out of companies that want to advertise on their service.

Maybe they aren't. But companies aren't equal. How many small companies that make stuff you would see on shark tank would it take to equal the advertising spend of Coca-Cola?

evgen• 4 years ago

[...] But companies aren't equal. How many small companies that make stuff you would see on shark tank would it take to equal the advertising spend of Coca-Cola?

It is also worth noting that the cost of customer acquisition for all of these smaller accounts is larger; it takes more effort for Twitter to scoop up buckets of pennies than it does to pick up hundred dollar bills.

nailer2• 4 years ago

Source is mediamatters, a left wing political advocacy organisation that poses as a fact checker. It might be true but I would find a better source before trusting the story.

nailer2• 4 years ago

For anyone that’s doubtful:

Media Matters was founded in 2004 by journalist and activist David Brock to "systematically monitor a cross section of print, broadcast, cable, radio, and Internet media outlets for conservative misinformation...every day, in real time.

Or for an example of people may dislike media matters: https://www.dailywire.com/news/media-matters-defends-wapo-sm...

alsaaro• 4 years ago

The not so secret subtext of this angst between Musk and advertisers is that Tesla doesn't advertise, yet has experienced the most growth and is the most valuable of all automotive firms.

Other firms, certainly must question the value and efficacy of their advertising budget, a real threat to the advertisement industry, not "brand safety."

I'd bet if Tesla did advertise; advertisement agencies wouldn't recommend their other clients pull their money from Twitter so hastily.

This is a case of biting the hand that doesn't feed them.

mhoad4• 4 years ago

This is delusional. I promise you they are doing this because it makes very very clear business sense and not some secret jealousy and resentment of dear Elon.

akomtu• 4 years ago

Wait, are we supposed to take the side of the poorly treated advertisers?

AftHurrahWinch• 4 years ago

Wait, are we supposed to take the side of the poorly treated advertisers?

It's interesting that you think we're supposed to take a side at all.

danans• 4 years ago

Around the same time, Musk blamed activist groups "trying to destroy free speech in America" for "pressuring advertisers."

I guess nobody has told him that pressuring advertisers is also a form of free speech.

chesneyc• 4 years ago

Twitter is a burning platform. If Musk hired MBA types they would've informed him of the current situation and mitigation strategies.Twitter Engineers are not the one's that will fix the company. I remember watching a WW2 documentary where the narrator said that Adolf Hitler's Nazi party would've been the first to produce the Atom bomb but their best scientists were locked up in concentration camps.I feel for the MBA types now locked in their concentration camps due to one man's hubris.

tempera• 4 years ago

This is a big win for Twitter! They will learn to do without and be independent of such blackmail maneuvers.

Twitter's top advertisers have pulled out of the platform

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