Referring to Elon Musk, people will remember his successes with Paypal, Tesla or SpaceX. But Twitter’s social media story is something completely different from previous successes because most businesses in this industry need companies to buy ads and try to please them, which is not easy for a company billionaires like Elon Musk.
Since officially taking power on October 27, 2022, Quartz assessed that Elon Musk has not made a clear move to address issues related to fake information or influential hate speech to businesses advertising on Twitter.
As a corollary, even if they call people back, or threaten with complaints that Twitter is about to default, no company wants to risk pouring money into a risky social network.
Who is more important than who?
Very clearly, Elon Musk is not good at services, or rather, pleasing others. The Tesla founder is very good at coming up with good ideas and solving technical problems, which is why Twitter has launched new products and services with limited ambitions to advertising.
However, it is quite difficult to declare directly to businesses that this social network is aiming to limit their dependence on advertising money, while still expecting them to stay without any action to guarantee their rights unrealistic.
A series of big brands such as Mercedes, Volkswagen, United Airlines … have announced to suspend advertising on Twitter until Elon Musk has made clearer actions to protect the interests of these businesses.
Worse, a series of social organizations such as NAACP or GLAAD have also campaigned to call for brands to boycott Twitter after exhaustingly dismissing half of the employees who have contributed many years to this social network without any notice have a satisfactory compensation program.
Of course, Quartz believes that the macro factor that causes the advertising budget to decline is also part of the reason for Twitter’s revenue to go down. But even in this context, social networks also need to be more sensitive when it comes to the interests of businesses, because in the end, whoever holds the money is more important.
Every dream needs financial backing, including Twitter
Quarrel
According to Quartz, Elon Musk is an outsider in both social media and advertising. Whether this billionaire is good at financial technology, automation or space technology, he has no experience in selling online ads or serving “god customers” at all.
Even with the Tesla empire that Elon Musk built, they are famous for not having a budget for marketing, and at the same time rejecting many traditional forms of advertising for the auto industry in the US, such as running commercials reported on the Super Bowl program.
“Tesla will not advertise or pay celebrities to do it. Instead, we use this budget to improve the quality of the product” CEO Elon Musk posted on Twitter in 2019.
Ironically, now Elon Musk is running a company where 92% of revenue came from advertising in the first half of 2022, the rest came from data licensing and green-mark account confirmation fees.
Therefore, it is not difficult to understand that this billionaire in the industry wants Twitter to give up its reliance on advertising revenue, but still calls on businesses to continue to pour money into this social network to overcome difficulties current towel.
According to Elon Musk, Twitter is currently losing $ 4 million a day while this billionaire has to bear a loan of $ 1 billion / year because of bank loans to complete the deal. The founder also sold nearly $4 billion in Tesla shares after he managed to raise enough money to buy Twitter.
Billionaire Elon Musk needs businesses to advertise on Twitter, but he himself criticizes and quarrels with customers. Instead of taking actions to protect the interests of businesses, Elon Musk criticized them for not supporting the dream of “free speech” when leaving Twitter. Even Elon Musk threatened to publicize and smear (Name and Shame) the names of businesses that stopped advertising on Twitter.
A series of supposedly immature steps in this marketing industry by Elon Musk have led many businesses to threaten to sue, even boycott Twitter in the context of the social network in need of money the most.
Obviously, it’s understandable that Elon Musk doesn’t want to have to submit to advertising businesses, but building it is not easy.
Twitter is in a weak position
Billionaire Elon Musk and many people once assessed that Twitter has much more potential than current business results, and this is one of the reasons why the $44 billion deal took place.
However, according to analyst Kelsey Chickering of market research firm Forredter, Twitter is a social network that is okay or not for businesses that need advertising. Twitter’s products and orientation are unappealing to businesses, not to mention the myriad political problems that make posting ads on them easy to criticize.
Although there are 238 million users, because it is famous for expressing personal views and debating political issues in the US, Twitter is much less attractive than Facebook, Youtube or Tiktok, social networks that solve problems to please both users and businesses.
In the same opinion, expert Jasmine Enberg of Insider Intelligence said that when advertising budgets are cut, Twitter will be the first object that comes to mind.
“Quiting ads on Twitter is an easy decision that doesn’t hurt brands much compared to other platforms like Facebook or Google” Enberg said.
In today’s difficult times, businesses will make effective use of every advertising dollar, with stricter and more demanding requirements. Therefore, “half-season” social networks like Twitter that do not know how to serve customers will be abandoned quickly.
Flirting
Elon Musk’s promises of a better Twitter sound very passionate, and with the status of the richest billionaire in the world, this dream will probably come true.
But reality gave Elon Musk a painful slap. Ignoring the story that this billionaire had to take out a loan to close the deal, Quartz said it was his eloquent statements in the fall of 2022 to renovate Twitter that caused this social network to lose advertising revenue.
This is the time when many major advertising contracts in the US are set up until next year by the media as well as social networking platforms. But Elon Musk’s “reform” pledges have intimidated brands.
“Instead of entering a 15-20% growth in 2023 as planned, Twitter has lost its future just because Elon Musk is against the businesses that are pouring money into this social network. Since April 2022, the specialized publication AdAge has said that businesses are worried and ready to stop spending money on Twitter because of Elon Musk” said Angelo Carusone, President of Media Matters.
Although Elon Musk has taken steps to save the situation such as meeting with advertisers on October 31, 2022 as well as urging people to stay on November 9, 2022, the results are difficult to say.
“I understand that people want quick results, but in reality the best way to see results is to use Twitter more, experiment with it, and give your opinion” Musk said.
Still, that’s not enough for advertisers.
“Twitter is not the biggest, most powerful, or even trendiest social network today. The platform has been at the bottom of the list compared to its competitors since before Elon Musk’s acquisition. But he didn’t do much to change that, if not make things worse” a brand that bought ads on Twitter told Quartz.
*Source: Quartz
Source: Vietnam Insider