Many of us in the ad industry following the Elon Musk / Twitter saga are agog at just how incredibly dumb it all seems.
“So…is Twitter the company now being run via shitposting on Twitter?”
We’re all scratching our heads, wondering if we’re missing something.
I don’t think it matters whether we’re missing something or not. The media business is, at the end of the day, a business.
Advertisers invest budgets with media owners with the expectation of performance, but also that those media owners will likewise invest in their own media properties and be professional custodians thereof.
Advertisers and agencies should not have to speculate for one single second whether Twitter is still a legitimate media business or if Elon is just doing it all for the lulz. Many are rightly walking away from the table entirely.
While Twitter may be the ad world’s main object of ire at the moment, it’s certainly not an isolated case.
I think the swift and unequivocal rebuke of Musk (in particular his attitudes on content moderation) is in part due to pent-up frustration from advertisers and agencies watching for years as digital media has grown increasingly nihilistic; a cavalier place where fakery, hate, chaos, and fraud are just a cost of doing business.
The boundaries of acceptability have been pushed back and back for years. Elon Musk just happens to have gone a few steps too far and is showing the entire industry that, in the end, nihilism is a losing strategy in the media world.
Many advertisers just want Musk to exhibit some basic level of seriousness. And I expect the underlying message of “we’re fed up with this shit” will have a ripple effect across the industry.
Is This Guy Serious?
Musk’s flip and arrogant persona may play well with his fans, but his actions paint a picture of a deeply unserious businessperson. Musk has made himself inextricable from Twitter, so his personal behavior calls into question Twitter’s viability as a media property.
Let’s consider a few examples of Musk’s unseriousness:
- On Friday 4 November, he laid off about half the workforce. Is anyone left to answer the phones? Elon, why did you acquire such a severely distressed asset in the first place?
- Musk has fanned the flames of an absurd sideshow over his proposed $8 per month fee for verified users (an amount possibly arrived at via haggling with Stephen King). The fee would amount to as little as one-tenth of one percent of Twitter’s 2021 ad revenue of $4.5 billion. It’s just…dumb.
- Musk has petulantly blamed “activists” for an exodus of Twitter’s advertisers and in so doing has announced to the ad world (i.e., his paying customers) that he knows nothing about running an ad-supported media business and views ad dollars as an entitlement.
Is this guy serious? Is Elon Musk capable of showing advertisers that he is professional, trustworthy, stable, and acting in good faith? Or is this all a $44 billion prank?
A Symptom of a Deeper Disease
It’s not as if Elon Musk’s cavalier attitudes around what constitutes a proper media company exist in a vacuum. Twitter had its share of scandals before Musk came along. And stepping away from Twitter for a moment, remember how badly Mark Zuckerberg wanted to avoid Facebook being categorized as a media company?
These attitudes (and resulting business policies and media quality) are partly the byproduct of the software world wanting to impose a consequence-free, high-margin “platform” model on the digital media world.
The result has been Platform Media companies that are vexingly unserious about being in the media business but are still perfectly happy to take advertisers’ dollars.
Take “brand safety” for example. It’s a concept that essentially assumes that a broken and dysfunctional ad-supported media ecosystem is a fact of life and puts the onus on advertisers and agencies to pick up the pieces on a post-hoc basis. This is akin to firing airline maintenance crews and expecting every paying passenger to bring their own parachute. “Caveat emptor,” indeed.
There is, of course, the inconvenient fact that advertisers fund this very media. But we’ve learned over the past week or so that apparently there is a limit to how much nihilism advertisers and agencies will tolerate. Musk obnoxiously pushed until he overstepped that limit, causing advertisers and agencies to start pulling budgets.
This may be a big joke to Musk, but it’s not a joke to CMOs who are entrusted by their boards to wisely invest marketing budgets of many millions of dollars, and it’s not a joke to Twitter’s peers and competitors who are watching with a keen eye to see how Musk’s “experiment” plays out.
What Are the Broader Implications of This Show-down?
I don’t expect or predict a miraculous, sweeping clean-up of digital media. Advertisers will still invest budgets into many different types of media as long as it performs.
But I think Musk’s nihilistic bumbling may nudge the Brand Safety Overton Window back in the direction of professionally curated, vanilla media and away from free-for-all platforms. Musk is, in many senses, the logical end state of the Platform Media mindset and it’s not going well.
Some of the world’s biggest agencies and advertisers are, in some respects, presently making an example of Twitter and I expect other media companies are taking note. For one thing, ad sellers representing Serious Brand-Safe Media will be pressing their advantage.
And the digital media landscape continues to evolve. Netflix and other streamers are coming online with large volumes of brand-safe TV ad inventory, that time-tested workhorse of the Old Media world. By contrast, the once-dominant “we’re not a media company” Facebook is not doing great.
And let me be clear: I’m not predicting or cheering the demise of Twitter. As a user I love Twitter! Nor am I predicting that Elon Musk will ultimately fail. I expect Musk is probably already waking up to the fact that his real customers (the ones most likely to solve Twitter’s cash flow issues) are his advertisers and their agencies, not his 113 million followers who pay nothing.
I could be wrong, but if this Musk / Twitter thing represents some kind of climactic show-down between Old Media and Platform Media, it doesn’t look like the nihilistic platform approach is coming away the winner.