Major advertisers have fled Twitter since Elon Musk took over the platform a little over a week ago admidst concerns about a rise in misinformation, hate speech, and other distasteful content under his watch. Musk’s company-wide layoffs cut major portions of the company’s content moderation team and its entire Ethical AI team, after all.
Musk, who spent his first few days at Twitter talking about how great things will be for advertisers, responded by threatening his own ad clients. “A thermonuclear name & shame is exactly what will happen if this continues,” Musk tweeted Friday. He was so rattled that he admitted Twitter was in a tight spot on Friday: “Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers.”
Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.
Extremely messed up! They’re trying to destroy free speech in America.
— Elon Musk (@elonmusk) November 4, 2022
That’s a confusing strategy, to say the least. Twitter doesn’t have the targeted advertising capability that marketers demand when they’re trying to sell individual products and services, so most of Twitter’s ad revenue comes from brand awareness campaigns. Companies paying to promote their image worry more about running ads alongside inappropriate content, and it’s hard to imagine how threatening to smear brands will promote healthy business relationships.
There’s good reason for companies to be concerned, even though Musk has said “nothing has changed with content moderation;” the billionaire Tesla CEO makes loud and conflicting statements about how he plans to moderate the platform, simultaneously declaring Twitter a haven for free speech absolutism while promising that it won’t turn into to a “free-for all hellscape.” Since the SpaceX CEO took over, the platform saw a massive spike in hate speech, with use of the N-word jumping 500%, according to one report. Musk himself tweeted and then deleted an obviously false conspiracy theory about an attack on the husband of House Speaker Nancy Pelosi.
Twitter controls just a fraction of the digital ad marketplace. For most big companies that buy ads on Twitter, the money they spend there is almost an afterthought in their overall marketing budgets. Cutting off that flow of ad dollars may not be a difficult businesses decision at a lot of companies, which means the general feeling in the air about Twitter could have a huge impact on the social media company’s bottom line.
It’s early days for Musk’s version Twitter, so corporate America is taking a wait-and-see approach to working with the platform. In the meantime, at least 10 blue chip advertisers closed their purse strings. Here’s a list of the biggest companies who’ve stopped advertising on Twitter.
One of the first companies to generate attention for cutting off Twitter ads was General Motors, which, it’s worth noting, is a competitor to Musk’s Tesla. Days before Musk’s Twitter purchase went into effect, GM announced it was “pausing” its ads on the platform, telling reporters:
We are engaging with Twitter to understand the direction of the platform under their new ownership. As is normal course of business with a significant change in a media platform, we have temporarily paused our paid advertising.
According to some analysis, GM was spending an average of $US1.7 ($2) million a month on Twitter ads. The move would set the stage for more advertising troubles over the coming days.
In a lot of other countries, pharmaceutical companies aren’t allowed to hawk their products directly to consumers, because regulators think your doctor should have a bigger influence on the medicine you take than marketing budgets. But in the United States, companies are free to advertise their pills directly to you. Pfizer won’t be doing it on Twitter, though, at least not for the time being. The company paused its Twitter spending last week.
You might not know the name Mondelez, but you know their products. The company built a billion dollar industry on snack foods, and they’re the makers of Oreos, Cadbury Eggs, Trident gum, and a variety of other delicacies. Mondelez said it will pause Twitter ads, according to the Wall Street Journal. The loss of Oreo ads deals a double-stuffed blow to Twitter; Mondelez was one of the platform’s top 5 biggest advertisers, and it’s organically popular on the social network as well.
REI went farther than most other companies in dumping Twitter. Not only is the company pausing ads on the social network, the company said it’s taking a break from posting Tweets altogether. The company told the New York Times that the move comes “given the uncertain future of Twitter’s ability to moderate harmful content and guarantee brand safety for advertisers.”
General Mills suspended its ads on Twitter in the days following Musk’s takeover. “As always, we will continue to monitor this new direction and evaluate our marketing spend,” a spokesperson for General Mills told the Wall Street Journal.
The multinational conglomerate is one of the biggest food companies in the US, responsible for Cheerios, Gold Medal Flower, Häagen-Dazs, and most importantly to this reporter’s diet, Count Chocula.
United Airline’s social media budget bought a one-way ticket off of Twitter last week, joining the list of big brands grounding their ad spend on the platform.
Volkswagen Group, the auto conglomerate which owns Audi, Bentley, Lamborghini, Porsche, Volkswagen (obviously), and others recommended that its subsidiary brands pause their Twitter advertising last week. So far, at least Audi followed suit and suspended its ads on Twitter.
IPG, formerly known as the Interpublic Group of Companies, is one of the biggest advertising firms in the world. The company influences a significant chunk of corporate America’s marketing budgets, representing brands such as American Express, CVS Pharmacies, Johnson & Johnson, and Spotify. On November 1st, IPG advised its long list of clients to pause advertising on Twitter for at least a week, a recommendation likely to sway millions of dollars away from Elon’s company.
The Carlsberg Group, a Danish brewing company that controls some of the biggest beer brands in Europe, advised its marketing teams to cut Twitter ads last week.
GroupM is another majorly influential player in the advertising business that most people probably haven’t heard of. As far as we know, the company hasn’t told its brands to stop advertising on Twitter, but the threat is in the air.
Elon Musk promised on multiple occasions that he will unban Donald Trump from Twitter. According to the Wall Street journal, a dozen high-end luxury brands who work with GroupM told the company to pull their ads from Twitter if the ex-president is allowed to rejoin. GroupM’s clients include LVMH, owner of Moët, Hennessy, and Louis Vuitton, as well as a number of other blue chip luxury goods companies.
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