Twitter in the Musk Era: What’s In Store for Brands?
Twitter in the Musk Era: What’s In Store for Brands?
About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...
Read moreOn October 28, 2019, Elon Musk's tweet read: “I hate advertising.” On October 27, 2022, Elon Musk completed his much ballyhooed and debated acquisition of Twitter.
Musk’s loathing of advertising has been well documented. In May of 2019, he tweeted a clarification on Tesla’s advertising-free marketing strategy saying “Tesla does not advertise or pay for endorsements. Instead, we use that money to make the product great.”
For the purpose of this post, I’m going to set aside the pages I could write on the irony of the “great product” statement… we can talk about why the Tesla service department has repeatedly told me that our car’s AC system just naturally smells like feet, and we shouldn’t be so focused on how the car smells at a later date. Musk has been abundantly clear that in the balance between paid, earned and owned media, paid media is the value-less leg of the stool.
It is also worthwhile to take a step back and think about what Twitter actually IS to best determine what impact this Musk-era Twitter might mean.
Some say that Twitter is a media company that must subsidize its capacity to host a broad, global, democratized media destination that holds professional accounts (from journalists and their publications to marketers and their brands) in equal footing to citizen creators. In this construct, the value proposition of a “universal town square for all” could draw larger audiences willing to accept and consider new subscription models, especially those models where advertising and promoted content is removed.
If this new massive recurring revenue base became predictable and stable over time, Musk could easily show advertising the door and instead charge a heftier fee to allow brands permission to even HAVE accounts. This model has been batted around in the days prior to the acquisition and Musk himself has noted that this could be an attractive path forward.
Others believe Twitter is an advertising business that leverages citizen creators, brands and media accounts to attract more users hungry for quick snippets of information or engagement. This audience would, in turn, represent a massive potential audience for targeted promoted content and advertising.
In this construct, quantity should theoretically win out over quality, requiring a constant stream of new users and accounts to flood into the community to constantly keep the waters full of prospective customers for advertisers hungry for clicks and views. This becomes a model where advertising pays the whole tab. “Cherry on top” revenue like subscriptions and priority access options like Twitter blue become important for bigger numbers but are not the primary focus of revenue projections. The revenue possibilities in this model could be endless when you consider the data Twitter can aggregate and “share” across an advertising network made up of…I don’t know…a global car company perhaps? Does SpaceX join the party and leverage the systems behind Twitter Spaces for pay-per-journey virtual trips into space or even ad-supported free virtual views? An interstellar ad network could make the Metaverse feel small.
Basically, Musk should get over his hatred of advertising. Quickly.
Regardless of how Musk views the platform, the immediate risk to his bottom line lies squarely in his own hands…more specifically his own Twitter account. Alienating users OR advertisers in week one is quite literally risky business. Musk, while audacious and bombastic, has the business sense to understand this. In fact, by Thursday’s take-over, he had already tweeted an “open” message to advertisers noting that his altruistic intentions to create a safe, free and vast space for all conversations will benefit advertisers. By Friday, Musk was making public statements indicating that accounts that had once been banned will NOT return until a broad coalition committee is formed to review policies and accounts. Despite all this, misinformation exploded including lots of celebration that Kanye West's account had been reinstated despite it never being banned.
Ironically, Musk isn’t Twitter’s biggest problem when it comes to advertisers. Twitter’s faltering value proposition has been YEARS old dating back to Dorsey-era Twitter where everything from weak content moderation policies, questionable measurement and fraudulent reporting repeatedly haunted the brand. While Musk will have to clearly articulate a value proposition to users intent on using Twitter as a content-forward social platform, he will ALSO have to clearly articulate a business vision and proposition that goes beyond the current (and often politicized) hype cycles.
Musk acknowledges the risk, joking he doesn’t intend to allow Twitter to become a free-for-all hell-scape. Yet we all understand human behavior…slowing down on the digital highway to watch the spectacle of a free-for-all hell-scape is akin to rubbernecks and a multi-car pileup…sometimes you can’t help but slow down and let curiosity take over. The descent could be fascinating to watch…but it won’t create the stickiness any durable business plan will require.
At this stage of the game, brand advertisers are in let’s see how this plays out mode…and I’m right there with them. Top leaders have been shown the door, including the Head of Legal Policy…as of penning this, the CMO and Head of People are still in the building. People will continue to do what people do…self-select what information and signals they allow into their world. On a personal level, my own Twitter experience will remain the same as I’ve seen professional engagement lessen over the last several years and more robust conversations transition to other networks like LinkedIn. But when there is an earthquake, Twitter is my first stop to see if Dr. Lucy has confirmed (if you know...you know.) Increasingly, users like me have started to think of Twitter as a source of “infotainment” to check what one-liners Steak-Umms has churned out today.
In the end, we will all have to wait to see and hear Musk’s business vision and see how that vision is turned into action by the leaders he installs to run the day to day. But I’ll just say this now…if Twitter starts to smell like the odor that comes from my Tesla’s AC, we are gonna be in for a bumpy ride.
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