What might Twitter’s sale mean to the ad industry?

By Mark Challinor

INMA

London, United Kingdom

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Described by many industry folk as “a major disruption to its ad business,” Elon Musk certainly made no secret about wanting control of Twitter and now he has achieved his dream. 

The world’s wealthiest man said: “Twitter has tremendous potential. I look forward to working with the company and the community of users to unlock it.”

The media industry had many reactions to the Elon Musk/Twitter news.
The media industry had many reactions to the Elon Musk/Twitter news.

So how could this affect advertising brands and agencies? Here’s what a few leading ad agency people had to say:

Key industry quotes

Karen Benson, executive vice-president/director of integrated media at Deutsch in New York, said:

“The idea that Elon Musk is going to solve the ‘free speech issue’ on Twitter is something that brands need to be mindful of when they think about content their brands align with — coupled with the potential that consumers may not be as engaged or weary of the platform if it becomes the wild west! Also, what will the role of ads be on Twitter with Musk at the helm? He has mentioned a subscription-type model. Does that mean more data for advertisers?” 

Alex Watts, head of social at DDB Sydney, said: “For brands, there are really two big watch-outs from Elon buying Twitter: safety and community. Will the hard work the platform has done to be a brand safe space be committed to or left behind? And will brands be comfortable with the new editorial direction of the channel? From a community perspective, we have to wonder what changes will happen to Twitter’s user base under Musk’s ownership and if that audience will remain as valuable to marketers as they are right now.” 

People/talent have been key. So far… 

“I had also widely pointed out that with other, big social media network takeovers (eg, Tumblr, MySpace, etc.) that these failed to gain real momentum under different leadership. The people, the talent, are what make these platforms really successful at the end of the day, and we’ll soon see if the people who use Twitter will appreciate Musk’s vision.” 

Will Twitter's current user base stay? If not, how does that affect ad revenue?
Will Twitter's current user base stay? If not, how does that affect ad revenue?

Sway Group Chief Executive Danielle Wiley added: “A lot of users have been threatening to leave the platform, which could be very alarming to advertisers who have sponsored content initiatives scheduled,” whilst Jon Morgernstern, head of investment at Vayner Media, had a different angle: 

“The biggest question for us will be around potential Twitter platform policy shifts. Namely, if users who under Twitter’s current terms were deemed ‘in violation’ (and thus banned), will they be allowed back on the platform, eg, Donald Trump (this just in on that question)? Should this take place, there will be various brand safety/suitability concerns that we will need to closely monitor and adjust for on behalf of our clients as they arise.” 

A premium Twitter?

Wiley added: “Brands will need to meaningfully reconsider the utility, motivations, and relevance of their content to stand out in a more meritocratic landscape. There is the possibility of fairly major disruption to Twitter’s advertising business, including a future where its capabilities are somewhat diminished — particularly from a targeting and tracking/attribution standpoint. Twitter to become more premium?”

So you can see why it’s all been described as a major disruption to Twitter’s ad business. We watch with interest for the next stage.

Looking on the bright side 

Of course, it’s not all worry. There will be new opportunities. With the amount of PR out there, there is the notion in the industry that there will be some major positive changes to be rolled out. While Musk gets his own momentum, his reputation for innovation is certainly well earned and who knows what will occur. It all may bring some exciting opportunities to the platform that accelerates growth. I guess we will have to wait and see.

INMA Digital Platform Initiative’s take on it all 

Robert Whitehead, INMA’s lead for the Digital Platform Initiative, told one of my industry colleagues recently: “Twitter makes three cents per tweet, which is well below what was its survival threshold. It needs a deep rebuild if it is to sustainably support content overhaul objectives. So far Musk has flagged he’s not a fan of more advertising, which makes up 90% of its revenues. He has suggested Twitter’s consumer subscriptions should include a tool to switch it off altogether.

“While it’s too early, Musk may look at likely at a return to a ‘classic’ digital platform business model regarding advertising. For media companies, this could mean that they might need to pay to become a professional contributor to publish their verified messages and possibly links to news.” 

As I said earlier, we will see soon what happens next. But maybe the above and what senior figures are saying can be part of your education of the agency planners and buyers you deal with, who are, without doubt, looking for guidance. Maybe you can be that trusted resource for them?  

Watch this space for more Twitter news, quotes, and insights as they develop.

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About Mark Challinor

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