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Illustration of Elon Musk’s silhouetted head with a Twitter bird log inside it. Outside the silhouette are dollar signs with wings. Paige Vickers for Vox

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Why advertisers aren’t coming back to Twitter

 Elon Musk is still the problem. 

Shirin Ghaffary is a senior Vox correspondent covering the social media industry. Previously, Ghaffary worked at BuzzFeed News, the San Francisco Chronicle, and TechCrunch.

There’s no getting around it. Twitter’s survival in the coming months depends on how its new owner, Elon Musk, manages his relationship with a key group of people: advertisers.

It’s been a rocky pairing since October, when Musk officially took over and many big-name advertisers paused spending on the platform. Almost five months later, the company’s standing with the advertisers that historically make up 90 percent of its revenue still hasn’t measurably improved.

More than half of Twitter’s top 1,000 advertisers before the acquisition have stopped advertising on the platform as of February, according to data from digital marketing analysis firm Pathmatics and shared with Vox. Out of Twitter’s top 10 advertisers pre-acquisition, only six still advertise on the platform, according to the firm. That affects Twitter’s bottom line: The company’s revenue was down by 40 percent, according to a December report by the Wall Street Journal. Fewer people also appear to be visiting Twitter’s website where advertisers create ad campaigns: The number of users visiting Twitter’s advertising portal page was down 18 percent in February compared to a year before, according to data from digital intelligence firm SimilarWeb.

Vox spoke with several advertising executives, former Twitter employees, and other industry insiders who explained why Twitter’s relationship with advertisers continues to suffer.

Sources described a lack of confidence in Musk’s ability to keep his promises about stopping Twitter from turning into a “free-for-all hellscape,” high turnover in Twitter’s sales department, and confusion about the company’s policies regarding content moderation.

Chief among their concerns is a perception that Musk has turned Twitter into a place where people can post racist, sexist, or otherwise harmful speech without much consequence. Major corporations don’t want to jeopardize what they call “brand safety” by associating with offensive content. Musk has taken a lax approach to content moderation — such as allowing Neo-Nazis, white nationalists, and other controversial figures back on the platform in the name of free speech.

Companies also worry about affiliating with Musk himself as he continues to post offensive tweets, including a recent one mocking a disabled Twitter employee (Musk apologized after facing widespread backlash). Making matters worse, some advertising executives say they no longer know who to talk to about their concerns because Musk has fired or laid off many key members of Twitter’s sales and brand safety teams. All of this, insiders say, has resulted in weaker trust in Twitter among a relatively small group of people who control major ad budgets.

“Elon doesn’t understand how advertising works,” said Lou Paskalis, a longtime ad industry executive and founder of AJL Advisory, a firm that consults with brands on their marketing strategies. “I think he thinks it’s a science first and then an art, when in fact, it’s an art first and then a science.”

Twitter did not respond to repeated requests for comment. Musk, however, discussed the company’s relationship with advertisers who may be hesitant to return to the platform in an interview at a Morgan Stanley conference earlier this month.

“What I’d say to advertisers and brands is: Use Twitter for yourself and believe what you see on Twitter, not what you read in the newspapers,” said Musk. “Because what you see on Twitter is the real thing and what you read in newspapers is not.” Musk said that hate speech on Twitter is actually lower than it was before he took over and that brands worried about their reputation can choose what kind of tweets they want to run their ads next to. Several recent outside studies have found a sustained increase in hate speech such as anti-LGBTQ and antisemitic slurs in the months since Musk took over, but Twitter has said that the “reach” of hate speech, or how much it’s being seen, has decreased (which is hard to verify independently without access to Twitter’s data).

In the end, Twitter needs advertisers more than advertisers need Twitter. Compared to Facebook, YouTube, and Instagram, Twitter has a much smaller, niche user base. Brands can easily shift their advertising budgets to the bigger players in social media. Whether or not Musk can win back brands — or figure out a feasible alternate plan to make money — will determine whether the company will ultimately go bankrupt. While Musk says Twitter is close to breaking even now that he’s drastically cut costs, he warned in November of the possibility of bankruptcy, and will see that risk increase if advertisers fail to return.

Although Twitter is smaller than its competitors, it has had an outsized influence in shaping world politics, news, and culture. So the precarious state of Twitter’s finances ultimately reflects the fragility of the future of Twitter itself and the future of discourse online, since there still isn’t a replacement nearly as popular.

“I don’t trust Elon at his word”

The advertising business — especially the kind of big-brand advertising that happens on Twitter — is built on establishing close working relationships between powerful advertising execs who control multimillion-dollar marketing budgets and the people who run Twitter’s sales team.

But many of those relationships have deteriorated in the past few months as the initial uncertainty around Musk’s takeover has turned into more permanent chaos.

One advertising executive who oversees tens of millions of dollars in ad spending for major brands on Twitter told Vox that a majority of their clients temporarily paused spending on Twitter in the 72 hours after Musk took over “just to avoid being caught up in something unpredictable” but thought that the situation would settle down. (This source spoke with Vox on the condition of anonymity due to fear of professional repercussions.)

“There’s a lot of noise in this industry,” they said. “If a platform is having issues and bad things are happening, you stop and wait for the issues to go away,”

But then, new issues emerged. Mass layoffs and resignations hit key leaders on the sales and brand safety teams. Musk began abruptly rolling out controversial product and policy changes, like the botched initial rollout of his Twitter Blue verification service which people used to impersonate public figures, or his “general amnesty” plan to reinstate thousands of accounts that were previously banned for things like hate speech or bullying. At the same time, Musk himself kept fanning flames by posting polarizing tweets, like a conspiracy theory about the violent attack on Nancy Pelosi’s husband. And so a majority of clients extended their Twitter spending pause.

In recent months, Twitter has offered steep discounts and promotions, the advertising executive said, to encourage clients to resume advertising. But advertisers are reluctant to make deals when they don’t know who they’ll be working with.

“I don’t know if the person I’m negotiating with today will be there today, tomorrow, or by the end of the week,” the ads executive said. “Trust is such an important currency in advertising. I don’t trust Elon at his word.”

If advertisers don’t trust Musk, it would help if he had a reliable lieutenant. But many trusted executives — even some who Musk initially praised — have left the company, including chief customer officer Sarah Personette, head of trust and safety Yoel Roth, and VP of client solutions Robin Wheeler. Chris Riedy replaced Wheeler as head of advertising sales in November. News outlet Platformer reported in February that Riedy was cut in a recent round of layoffs. But Vox can confirm that Riedy is currently working at Twitter.

Twitter has also halted a practice that’s an industry standard: convening its advertising influence council, a quarterly group meeting with around three dozen top advertisers, according to sources. The council was an important venue for Twitter execs to discuss “real business issues” with some of its biggest advertisers, said Paskalis. It allowed Twitter executives to build key relationships over time with powerful chief marketing officers of major brands and ad agency executives. When prior Twitter CEO Jack Dorsey met with the council, for example, he explained his mission to make Twitter a global town square while still balancing user safety, Paskalis said. Musk met once with the council in November shortly after he took over, but according to Paskalis, the group has not met since.

Making things more complicated is how Musk initially took a publicly combative approach, at times, to the same advertisers Twitter needs to woo. In November, he publicly threatened to “thermonuclear name & shame” advertisers who left Twitter.

“There are other places I can spend my money without having to worry that I’ll be attacked by Elon, or my clients will be, or that he will say something that will force me to turn off my ads,” one advertiser said.

Musk, who has long been a provocateur on social media, has shown no signs of buttoning up his public persona to minimize advertiser fallout. In recent weeks, in addition to his public dispute with a disabled former Twitter employee, he has tweeted comments defending the “QAnon Shaman” who stormed the US Capitol on January 6, 2021, and shared a sexist joke meme comparing women to volatile “creatures.”

“What we hear from Elon every single day gives us new outreach and entree to advertisers,” said Rashad Robinson, president of civil rights group Color of Change, which is pressuring advertisers to drop Twitter because it says the platform is promoting harmful content.

Robinson said his group is planning to increase pressure on advertisers that continue to stick with Musk.

What Twitter could do to save its business

It’s clear that Twitter needs to change its advertising approach if it’s going to keep the lights on. Musk has tried changing the company’s strategy to rely less on big-name brand advertisers. But the easiest solution would be to salvage Twitter’s relationship with brands — which some executives said is still possible if Musk gives up control.

Musk has his own ideas about how to make Twitter more profitable.

At first, Musk’s plan to deal with advertiser fallout was to become less reliant on advertising. Musk said he wanted to move Twitter to a subscription-based model in which the company would make most of its money by charging users for premium services. The problem is that Musk’s first attempt at that, its revamped version of Twitter Blue, had a disastrous initial rollout and, so far, still doesn’t have nearly enough subscribers to make a meaningful impact on the company’s bottom line (as of mid-January, it reportedly had 180,000 subscribers, or about 0.2 percent of the platform).

More recently, Musk has proposed another solution to his advertising problem: targeted advertising. The idea is that Twitter should make ads more specific to users’ interests based on what they’re tweeting about and by using machine learning to predict their preferences.

“Historically, with [Twitter’s] advertising being mostly irrelevant in the past, we’ve been wasting people’s time. And that’s not good. Going forward, Twitter will have very relevant, useful advertising,” Musk said at the Morgan Stanley conference earlier this month, saying this new approach will bring a “massive increase in revenue.”

Twitter’s new advertising model will be similar to Google’s in that it will target ads to people based on what they’re interested in, Musk said.

Many people with knowledge of the online ads industry — including former Twitter advertising and product employees Vox spoke with — agree with Musk that Twitter’s advertising products have room for improvement. But some questioned whether Musk’s approach made sense, since Twitter, unlike Google and Facebook, has less data it can use to target ads.

Facebook knows people’s backgrounds, friends, and interests because people largely use their real name to sign up and are friends with their real-world connections. Google knows its users’ interests based on what they’re actively typing in their search bar. Twitter, by contrast, doesn’t have all of that information for most of its users, since you don’t need to share your real name to make an account and most people passively scroll Twitter rather than search for specific content.

“Search advertising and advertising on Twitter are just different models altogether. It’s not even an apples-to-oranges comparison, it’s just completely different,” said Jason Goldman, the former VP of product at Twitter from 2007 to 2010. Goldman said Musk’s comments about making Twitter’s ads more like Google’s “reveal a pretty profound ignorance of how the online advertising industry has evolved in the last 20 years.”

Twitter also doesn’t have nearly the number of users that Facebook and Google have. And while Musk claims that Twitter’s daily active users are higher than ever, the latest outside estimates are mixed. Two analytics firms, SimilarWeb and Pathmatics, show a drop in Twitter’s user growth year over year in the past few months. Another firm, however, Apptopia, showed slightly higher numbers in the past three months when compared to the year prior.

Despite all the challenges, there may be some hope for Musk to regain trust with advertisers. The CEO of one of the largest advertising agencies in the world, WPP, recently said that Twitter “seems to be a lot more stable the last few months than perhaps it was toward the end of last year” and that “clients want to start to look at how they can come back onto Twitter.” An executive at another major advertising firm, Publicis, made similar comments in December, leaving room for its clients to return to the platform.

In recent weeks, Twitter announced new tools it’s working on that let advertisers make sure their ads aren’t shown next to controversial tweets — a sign that it’s trying to entice advertisers who are spooked about brand safety. It may take time to win them over: “There’s just very little trust at the moment in Twitter’s ability to actually follow through on those moderation promises,” said Ruben Schreurs, chief product officer at the ad media consultancy firm Ebiquity.

To regain trust, some ad executives see a simple solution to Musk’s problems: Find a new CEO. If Musk resigned, as he said he would by the end of this year, that would go a long way to alleviate advertisers’ concerns, sources said.

“He should resign as CEO, stop tweeting, become chair, appoint a board, and put in a governance structure,” said one advertising executive. But the problem is, they said, that “Twitter is now so fundamentally broken that even if you’ve got a new CEO, I’m not confident that that CEO will be around for a month.”

There may even be a middle ground: Musk could remain CEO if he publicly backs and commits to a sales leader with “gravitas” who commits to “very clear, well-informed standards for advertising on Twitter.” Then advertisers “will gladly start to return,” said Schreurs. “I’m pretty sure about that.”

In his conference call with Morgan Stanley, Musk said that Twitter was close to breaking even in profitability by the end of the year. While that may be true at the moment because of how aggressively Musk is cutting costs, he’ll need to also increase revenue to keep Twitter afloat.

If Musk doesn’t change his advertising strategy, we may continue to see a degraded, or all-out denigrated, Twitter. Already, Twitter is having reliability problems, with an uptick in network outages and product glitches. That will only increase if the company can’t afford to pay its staff to run the site well.

One former employee on Twitter’s sales team who spoke with Vox on the condition of anonymity for fear of professional repercussions said that when Musk took over Twitter, they were initially hopeful that he might be able to energize the company’s advertising operations and make the company more profitable and competitive.

Instead, Elon is “crushing the company and everything that it built,” they said. “For what end, I don’t know.”

Update, March 24, 11:05 am: This article was originally published on March 23 and has been updated with additional information about Chris Riedy’s role at Twitter.

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