Miami Herald

After Elon Musk’s takeover, Twitter’s ad falloff is steep, analysis finds

- BY NAOMI NIX AND JEREMY B. MERRILL

More than a third of Twitter’s top 100 marketers have not advertised on the social media network in the past two weeks, a Washington Post analysis of marketing data found — an indication of the extent of skittishne­ss among advertiser­s about billionair­e Elon Musk’s control of the company.

Dozens of top Twitter advertiser­s, including 14 of the top 50, have stopped advertisin­g in the few weeks since Musk’s chaotic acquisitio­n of the social media company, according to The Post’s analysis of data from Pathmatics, which offers brand analysis on digital marketing trends.

Ads for blue-chip brands including Jeep and Mars candy, whose corporate parents were among the top 100 U.S. advertiser­s on the site in the six months before Musk’s purchase, haven’t appeared there since at least Nov. 7, the analysis found. Musk assumed ownership of the site Oct. 27.

“Mars started suspending advertisin­g activities on Twitter in late September when we learned of some significan­t brand safety and suitabilit­y incidents that impacted our brand,” said a statement to The Post from Mars, which, in addition to its namesake candy, makes other foods and pet prodcontin­uing ucts.

Pharmaceut­ical company Merck, cereal-maker Kellogg, Verizon and Samuel Adams brewer Boston Beer also have stopped their advertisin­g in recent weeks, the Pathmatics data shows. The companies didn’t respond to requests for comment from The Post.

Pathmatics data is generated from collecting the ads shown to a sample of Twitter users in the United States. The company estimated that each top marketer’s ads were shown tens of millions of times per week or more during their busiest weeks on the site, with some of the advertiser­s’ ads being shown billions of times over the six months before the pause.

TWITTER RELIES HEAVILY ON ADVERTISIN­G

Wall Street has long viewed Twitter as a company that moved too slowly to push out products that would convert its viral popularity into revenue. And while Musk has been scrambling to cut costs and find alternativ­e forms of revenue, Twitter is still heavily reliant on advertisin­g. Last year, nearly 90 percent of the company’s $5 billion in revenue came from advertisin­g, while the rest was derived from data licensing and other services, according to regulatory filings.

Meanwhile, Twitter recently laid off some employees in its sales division, the mass exodus of employees at the company, the Wall Street Journal reported this week.

Twitter is best known as a platform for big corporatio­ns to increase awareness of their companies with a large and diverse audience through brand advertisin­g campaigns — the kind many companies are eager to cut when the economy sours or a given marketing platform no longer seems like a solid investment, according to experts.

A MOMENT OF CHAOS

Marketers are reevaluati­ng Twitter during a moment of chaos as Musk makes dramatic changes to the staff and the platform. The billionair­e slashed roughly half the workforce and then issued an ultimatum that spurred hundreds of other employees to quit, including many involved in making sure the site was free from content that advertiser­s would prefer to not be associated with.

In the hours after Musk took over, Twitter experience­d an influx of racist and anti-Semitic posts that tested the boundaries of Twitter’s rules under a new owner who for months had signaled he would ease many of Twitter’s content moderation practices.

Matthew Quint, director of the Center on Global Brand Leadership at Columbia Business School, said that many companies are under “pressure, from a range of their stakeholde­rs

and consumers, around being connected with content that is viewed as inflammato­ry.” The challenge for them and for Twitter, he said, is that Musk is becoming “a very strong brand himself, and a controvers­ial brand.”

“The more he is out in the front, the more advertiser­s may . . . just choose to say, ‘I’m still not ready to be heavily associated with a Musk platform at this point,’” Quint said.

BRAND ADVERTISIN­G VULNERABLE

Even before Musk took over, marketers were pulling back on their digital advertisin­g as worries about the economy proliferat­ed. The chaos at Twitter and the advertisin­g pause come at an inconvenie­nt time: The final months of the year generally are when advertiser­s increase spending in an attempt to capture the holiday shopping rush and plan for prime-time events such as the Super Bowl, experts say.

This year, the falloff in advertisin­g also hits Twitter

during the World Cup, a time when advertiser­s might be interested in reaching an internatio­nal audience; 75 percent of Twitter users are outside the United States.

Brand advertisin­g is particular­ly vulnerable because it is generally intended to develop recognitio­n and loyalty among future potential customers. Companies have a plethora of other platforms to reach large audiences, such as television shows, publishers and other social media companies, experts say.

By contrast, tech companies such as Facebook and Google are known for offering marketers the ability to target their advertisin­g campaigns to a narrowly tailored section of users who are most likely to buy the product after seeing or clicking on the ad — a phenomenon known as direct response marketing.

“Twitter, for most of these brands, has never been a critical part of their ad buy,” said Andrew Lipsman, an Insider Intelligen­ce analyst who covers retail

and e-commerce. “It’s a big enough channel that they are going to get those dollars, but it’s one of the easiest pools of spending to remove.”

Musk has had an evolving relationsh­ip with marketers and civil rights groups. Late last month, Musk posted on Twitter a letter to advertiser­s vowing that the site wouldn’t become a “freefor-all hellscape, where anything can be said with no consequenc­es.”

As reports surfaced that Musk had frozen some employees’ access to content moderation tools, civilsocie­ty groups pushed Twitter’s top 20 advertiser­s to tell Musk they would suspend their marketing campaigns if he undermines the social network’s community standards.

Musk’s “decisions over the last month have been erratic and alarming, but this decision is dangerous and a threat to American democracy,” tweeted AntiDefama­tion League CEO Jonathan Greenblatt. “We need to ask — is it time for Twitter to go?”

 ?? MUHAMMAD ATA IMAGESLIVE/Zuma Prses Wire/TNS | Nov. 5 ?? Dozens of top Twitter advertiser­s have stopped advertisin­g in the few weeks since Elon Musk’s chaotic acquisitio­n of the social-media company, according to an analysis.
MUHAMMAD ATA IMAGESLIVE/Zuma Prses Wire/TNS | Nov. 5 Dozens of top Twitter advertiser­s have stopped advertisin­g in the few weeks since Elon Musk’s chaotic acquisitio­n of the social-media company, according to an analysis.

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