Matthew Field
Thu, 30 November 2023
With Twitter losing advertisers left and right because of Elon Musk’s tweets, contrition from the billionaire would have been expected.
Yet on stage at an event in New York this week, he was anything but. Musk had a blunt three word missive for companies that had stopped advertising with his social network: “Go f— yourself.”
Speaking at a New York Times event before an audience of business executives and billionaires, the Twitter chief accused companies of trying to “blackmail” him and suppressing free speech.
Musk waved to Bob Iger, the Disney chief executive sitting in the audience who is among those to have stopped advertising on the social network.
“Hey Bob, if you’re in the audience,” Musk said after his expletive. “That’s how I feel: don’t advertise.”
The defiance has stunned the business world. Any hope of the advertising boycott reversing now looks vanishingly slim.
Musk’s outburst will also lead to renewed questions about the future of Twitter, since rebranded as X, under his ownership.
Since his $44bn takeover a little more than a year ago, Musk has overseen the destruction of more than half of the company’s value. After burning any remaining bridges with adland this week, how much longer does Twitter have before it runs out of road?
Twitter’s ad boycott stems from the man at the top. Companies have become increasingly concerned about Musk’s approach to tackling hate speech, his impulsive personal use of the social network and his endorsement and boosting of conspiracies and anti-Semitism.
Musk’s increasingly erratic online remarks have included calling an anti-Semitic conspiracy “the actual truth” and this week posting, then deleting, a meme related to the “Pizzagate” conspiracy – a bizarre and false claim that Democrat politicians ran a child abuse ring from beneath a pizza restaurant.
Advertisers are fearful of the impact of their brands appearing near objectionable content and have quit in droves.
Speaking at the New York Times event prior to Mr Musk’s appearance, Disney chief Iger said: “By him taking the position he took, we felt that the association with that position, and Elon Musk and X, was not a positive one for us.”
He refused to be drawn on whether Disney would return to the platform.
Other major advertisers that have quit include Sky-owner Comcast, Coca Cola, IBM, Warner Bros Discovery and Apple.
Disney chief executive Bob Iger spoke at the same event at which Elon Musk rebuffed the ad boycott and outlined the logic behind the move - Michael M. Santiago/Getty Images
Market intelligence company Sensor Tower estimates that around half of Twitter’s top 100 advertisers have stopped advertising on the site completely since Musk’s October 2022 takeover. The list of brands that remain, which includes Amazon and Mondelez, is growing shorter by the day.
The Telegraph this month revealed that the UK Government has also stopped advertising on the site, echoing similar moves by the European Commission. Musk’s “actual truth” remark prompted a rare direct criticism from the White House.
Musk has expressed regret for the tweet, calling it the “dumbest post that I’ve ever done”.
“I arguably handed a loaded gun to anti-Semites,” he said. “For that I am quite sorry, that was not my intention.”
But he has also sought to downplay his incendiary style, saying: “Once in a while I will say something foolish”.
The F-bomb he dropped on stage has only worsened his pariah status in adland.
Paul Bainsfair, director general of the IPA, which represents British ad agencies, says Musk’s comments were the “exact opposite of the reassurance that advertisers and their agencies are looking for”.
“Twitter was once a highly regarded platform by our industry… Given recent activity, however, is it a surprise that some advertisers are responding directly to Musk’s words and actions?”
One industry source says the reaction to Musk’s comments was “incredulity”, adding: “He’s basically sacking off the platform – intentionally or otherwise.”
Musk’s outbursts have yet again undermined the efforts of his recently-installed chief executive Linda Yaccarino to repair relations between Twitter and advertised.
Twitter chief executive Lind Yaccarino's effort to draw advertisers back to the platform are being derailed by Elon Musk's outbursts - Slaven Vlasic/Getty Images
A former advertising bigwig at NBCUniversal, Yaccarino has recently launched a charm offensive in a desperate bid to win back brands’ trust.
Earlier this month she flew to London to woo executives in Soho, meeting with figures including Mark Read, chief executive of WPP.
In an effort to smooth over relations following Musk’s comments, Yaccarino on Thursday said: “X is standing at a unique and amazing intersection of Free Speech and Main Street.”
For his part, Musk has argued that concerns about his tweets and, more broadly, hate speech on the platform are overblown.
He has accused campaign groups of driving away advertisers and is suing activist groups Media Matters and the Centre for Countering Digital Hate.
Musk has also been critical of the Anti-Defamation League, the US group that campaigns against anti-Semitism.
The billionaire this week argued that he should be judged by his actions – such as the success of Tesla or Starlink – rather than off-colour remarks online. “I see a lot of people who care about looking good while doing evil, f--- them,” he added.
Despite Musk’s huge personal wealth, Twitter is now in a precarious financial position. The billionaire vastly overpaid for the social network, valuing it at $44bn at a time when technology stocks were plunging.
In October, he estimated it was worth closer to $19bn.
Musk has tried to encourage Twitter users to pay a monthly fee for the site to drive new revenue streams. Yet it is not enough to offset the advertising exodus. The billionaire estimates Twitter will draw in $3bn this year, down from $5bn in 2021.
The takeover has loaded up Twitter with debt – around $13bn – and Musk owes roughly $1.5bn a year in interest payments to a series of banks.
Musk could continue to use his vast pool of Tesla stock – worth some $100bn – to prop up the company, but he previously said he would not sell any more stock for two years.
Bruce Daisley, the former head of Twitter in the UK, says: “They’re losing more money and internally they’ve already started talking about another round of job cuts.”
The exodus of advertisers threatens to “kill the company”, Musk said on stage, adding: “The whole world will know that those advertisers killed the company.”
Industry watchers speculate that Musk knows Twitter is in its death spiral and the only thing left to do is blame boycotting brands.
“Musk seems to be preparing everyone for him calling it a day,” says Daisley. “He doesn’t want failure to be pinned to him so he’s ready to blame Disney and global brands: ‘Look what you made me do.’”
No comments:
Post a Comment