It has been a turbulent 12 months over at the social media platform formerly known as Twitter, kick-started last October when tech billionaire Elon Musk finally completed his long drawn-acquisition of the site.
An unabashed eccentric, the South African’s consistently erratic behaviour at the helm of one of the world’s biggest companies has led the firm into an alarming advertising nosedive – with Musk himself admitting over the summer that X’s ad revenue had fallen by as much as 50% since his takeover.
Even before Musk’s acquisition, X was proving a difficult proposition to advertisers, but was still on the whole a relatively profitable one – after all, it is still the fifth largest ‘traditional’ social media platform.
Some had hoped that top media exec Linda Yaccarino’s appointment as CEO in June might help steady the ship, although Musk’s incessant antics are hardly helping her mammoth task.
Musk’s impact: How did it come to this?
Despite his undeniably pivotal role in the fiasco, to say that Elon Musk is root of all X’s problems would be unfair.
In its former guise X had been experiencing problems for some time – it had often hosted controversial content and a is still a popular stage for vitriolic political discourse.
All of this means it is not exactly the ideal space for brands to advertise, as Born Ugly’s head of provocation Wander Bruijel observes: “X was already struggling to monetise its audience as it battled to get control of an increasingly polarised user base, and an outdated model undermined by more evocative platforms like Instagram and TikTok.
“Elon to a great extent was its provocateur-in-chief long before he took over and subsequently sucked the platform dry of all of its equity. From the moment he stated his intent to buy the business, X has been in an existential crisis and become Musk’s personal plaything. In 2019, he stated to hate advertising.
“Famously, he is himself the living breathing advertising for his businesses. What he seems to have misunderstood, however, is that there is a difference between being an ad for your products and being a platform for others to advertise on.”
As Bruijel notes, Musk’s impact is undeniable. Although X was already in difficulty, his takeover has only served to drive its brand appeal into the ground. After all, who wants to advertise on a service that is so vulnerable to the switchblade whims of its owner?
“Since Musk’s takeover of X/Twitter, some big brands have packed their bags,” Kubbco CEO and founder, Chris Kubbernus notes.
“It’s not just about tightening budgets, or the challenges of ad-tracking in this new data privacy era, many brands are also skittish about his political views and discourse.”
Seemingly, there can be no more tangible example of Elon Musk’s nefariously fickle decision making than the highly-criticised rebrand itself, throwing away well over a decade of brand equity and substituting one of the world’s most iconic logos for an utterly non-descript X.
Bruijel adds: “Elon has single-handedly devalued an already diminishing platform, stripping it of its equity, admitting it is filled with bots, threatening to put it behind a paywall, inviting extremism into the platform thanks to his own erratic behaviour, and clumsily replacing the platform’s greatest asset with an ‘X’.
“He has turned the platform into an unpredictable wasteland with an increasingly unclear demographic. The opposite of what advertisers are looking for. Fundamentally, advertisers are conservative creatures – they like certainty. They are under continuous pressure to show their investment delivers results.
“With several advertisers having had their fingers burnt in recent times, they have understandably become even more reticent to taking risks.”
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Can the Twitter/X advertising exodus be stemmed?
With the introduction of so-called ‘sensitivity controls’ that enable advertisers to select the kind of content next to which their brands can be shown, Musk had hoped to abate some of the exodus. His lawsuit against an anti-hate speech group that criticised X’s lax controls however, will hardly tempt fleeing advertisers to rush back.
For many, like Cubaka CEO Simon Rutherford, these sensitivity controls are simply “too little, too late” to persuade advertisers that X can ever again be a sound investment. He adds that Musk’s personality renders any such changes redundant as there is “there’s no guarantee that the controls will be in place for very long” anyway.
Ideally, what X needs right now is stability – but that simply isn’t how Musk operates. He likes his carefully constructed maverick image and more than plays up to it. Echoing this, Bruijel believes that in order to stem the tide, X needs to favour a ‘steady Eddie approach’ with a ‘predictable stream of innovative formats and ways to target and engage a relevant audience.’
He continues: “The new sensitivity settings are unlikely to offer the certainty brands need to entice them back. Frankly, it feels like a concession has been made to extreme content on the platform rather than putting in place a meaningful way to target audiences and mitigate risk for brands that work hard to adhere to codes of practise.
“It says a lot about the attitude towards content on the platform, making highly sensitive content the default to navigate around rather than offering a meaningful advertising platform centred around receptive audiences.
Will X ever be viable again?
With such an unstable leadership structure, will X ever truly be able to recover the extensive ground it has lost in the eyes of advertisers?
Many had hoped that Linda Yaccarino’s appointment might help ease the worries that many brands felt about working with the platform – although it would appear that Musk is still making sweeping executive decisions that undermine any hard work that she may doing behind the scenes.
In a witheringly critical take, Bruijel claims that “In Yaccarino, Elon has found a CEO foolish enough to take the job.”
“Her ability to drive through change was torpedoed long before she was even appointed. It is unlikely that she will be able to step beyond her boss’s shadows and set out a clear vision of her own for the platform that won’t inevitably be undermined by him.”
Would the touted decision to put X behind a paywall really help it recover and grow? How realistic would it be to expect the public to pay to use a mass social media platform like X?
Musk claims that the move would be necessary to counter bots, and perhaps it may lead to better content controls – but the inevitably massive drop in user numbers would surely dissuade advertisers.
Interestingly, some commentators have suggested that Musk’s series of changes are designed to systematically change the way in which X operates – making it an “everything app”, that internet users will find unavoidable.
If this is the case, advertisers would be far from Musk’s main concern as Kubbernus explains: “Musk isn’t trying to turn X into just another ad billboard. He’s got a vision that goes beyond microblogging. He wants to make X like WeChat, the app of everything.”
Will Musk and Yaccarino succeed in that task? Fat chance according to the ever positive Bruijel who believes that: “For people and brands to adopt an everything app, they must trust those at its helm to have their best interests at heart. Unfortunately, Elon is increasingly beginning to resemble a Bond villain.”
If Musk truly is looking to fundamentally change X’s modus operandi – and these aren’t the whims of a petulant billionaire born into a life of luxury – then it will not form a promising proposition for advertisers for some time.
Quite apart from the obviously glaring issues around harmful content and hate speech, any sort of stability is unlikely to return for the foreseeable future.