Many in the advertising industry are concerned that Elon Musk’s $44 billion agreement to take Twitter Inc private could spell the end of the social media platform’s advertising business.
However, Madison Avenue’s attitude toward Musk’s future version of Twitter has changed in the weeks since the Tesla Inc chief executive announced the transaction on April 25.
Optimism is spreading and manifesting itself in two ways.
Some ad buyers are hoping to get better deals from a corporation that is going through a major transformation. Others believe Musk, who has dribbled new product ideas on Twitter on a daily basis, can do what Twitter hasn’t: introduce new products faster, according to advertising executives who talked with Dailion.
Musk’s quest for rapid product development is thought to attract more new customers, laying the groundwork for a better marketing climate.
After Musk appeared to throw cold water on Twitter’s $5 billion ad business, declaring that the firm should be a forum for free speech and questioning the platform’s reliance on ads for revenue, the ad industry’s outlook darkened.
According to the New York Times, Musk anticipates Twitter to reach 931 million users by 2028, up from 229 million in the most recent quarter, and ad revenue to more than double to $12 billion, accounting for nearly 45 percent of overall revenue in the same time period.
Despite Musk’s repeated claims that he wants to keep content censorship to a minimum on the platform, he appeared in a video with European Union industry official Thierry Breton on Monday to discuss the impending Digital Services Act, which would require platforms to restrict unlawful content. In the near term, several ad agencies are already recommending clients reconsider doing business with Twitter. Musk said he “was very much of the same mind” and agreed with “everything [Breton] stated.”
One anonymous ad agency executive predicted that in the following months, negotiations to drop ad pricing on behalf of some clients would begin, as Twitter may be more flexible during the period of uncertainty before Musk completes his takeover bid.
According to Lizzy Glazer, vice president of connections planning at Code3, which has worked with brands such as Chipotle, Dior, and Gap, some clients will be advised to consider increasing their investment in Twitter in the near future to take advantage of the buzz that Musk has helped generate on the platform.
During a Financial Times conference on Tuesday, Musk stated that he would overturn Twitter’s permanent suspension of former US President Donald Trump.
Ad and marketing professionals who talked with Dailion said they’re keeping a tight eye on any adjustments Twitter might make to the platform, and that most advertisers haven’t made big changes in their spending yet, assuaging fears of Twitter abandonment.
According to some experts, under Musk’s leadership, Twitter may become a more appealing environment for brands.
According to Erica Patrick, director of paid social media at ad agency Mediahub Worldwide, which counts Netflix Inc and Fox Sports among its clients, Musk might help jolt Twitter into becoming more competitive with new features and contribute to larger user growth.
“As a social network, Twitter has always been fourth in line,” she explained. “(Musk) is a creative thinker who can think outside the box. There is a lot that a private corporation can achieve more quickly.”
Even the possibility that Musk’s ownership could lead to looser content regulations will benefit some marketers hoping to capitalize on viral events, according to Ishan Goel, head of Goel Strategies, a marketing firm that has worked with brands such as Hulu and Colgate.
“You get the most viral moment as a marketer when there’s upheaval,” he remarked.