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Elon Musk’s Twitter takeover raises concerns among marketers

General Motors suspended its paid advertising on Twitter after Musk’s takeover, saying that the platform will change now and that it wants to understand the direction Twitter will take.

By  Maryam Farooqui and MoneycontrolNov 1, 2022 12:34 PM
Elon Musk’s Twitter takeover raises concerns among marketers
Elon Musk, who earlier this year had dropped the plan to acquire Twitter citing a high number of fake accounts on the platform, had said that advertisers would not be able reach the customers they intended if Twitter was flooded with bogus accounts. According to Musk’s statements earlier this year, 10% of the platform’s daily active users who see ads are inauthentic accounts (Representative Image via Unsplash)

Advertisers in India are expecting Twitter to be a brand new playground with Tesla CEO Elon Musk taking over the platform in a $44-billion deal. However, marketers are also concerned about how the new leadership will pan out for advertising on the platform.

A day before the acquisition, Musk had told Twitter advertisers in a note that he aspires for the microblogging site to be the most respected advertising platform in the world.

A new playground for brands

“Enforcing no strict measures while adhering to the rules and regulations might be an image makeover step for the platform. Being a tech evangelist, Musk might turn the platform into a brand new playground, which will help attract a whole new crowd. He is popular with Gen Z for his contributions to Web 3.0, crypto, and this will pique the interest of not only Gen Z but also of brands in the BFSI, FMCG and automotive space,” said Mitesh Kothari, co-founder and chief creative officer, White Rivers Media, a digital marketing agency.

He said that they have observed a positive uptick in all the Gen Z, Y and CMOs’ (chief marketing officers) interest in Twitter post Musk’s takeover announcement.

Musk will find creative ways to advertise the right product in front of the right audience, said marketing agency SocioClout’s founder and CEO Bitesh Singh, who noted that the Tesla CEO has already expressed his distaste for conventional advertising.

“In Musk’s words, ‘Low relevancy ads are spam, but highly relevant ads are actually content’. That’s a good starting point. You know you are doing marketing right when ads become desirable content for the audience,” said Singh.

Musk, who earlier this year had dropped the plan to acquire Twitter citing a high number of fake accounts on the platform, had said that advertisers would not be able reach the customers they intended if Twitter was flooded with bogus accounts. According to Musk’s statements earlier this year, 10% of the platform’s daily active users who see ads are inauthentic accounts.

Kothari thinks that Twitter’s commitment to removing bots and spammers can reassure marketers.

“We are looking forward to higher engagement rate on the platform as more authentic profiles will access the platform as fake profiles will be out of the picture,” said Shailendra Singh Mehta, head, paid media, AdLift, a Gurgaon-based digital marketing firm.

Advertisers’ concerns

However, the back and forth on Twitter’s acquisition raised concerns among advertisers, and marketers said that they see the current leadership as risk-taking.

Musk in general is very combative with authorities, noted Mayur Milan, director, brand communication and digital, Ideosphere Consulting, a Pune-based communications consultancy.

“Musk has already squared off against the Indian government with Tesla and EV (electric vehicle) policies. There is no way to rule out that he may find actions in India not to his liking and make changes accordingly,” he added.

As per marketers, advertising business that forms the bulk of Twitter’s revenue is not on a par with other social media platforms in India

Brands might find some aspects a bit risky like the manner of acquisition, the instant firings and Musk’s unpredictable personality as seen on social media, said Siddharth Devnani, co-founder and director, SoCheers, an ad agency.

“While these factors might not impact brands’ spending in the short term, they will be on alert to realign their strategies if anything backfires. Moreover, his persistence to make Twitter more open and inclusive might not be ideal for all advertisers, and some brands might make the hard call,” he said.

Auto company General Motors suspended its paid advertising on Twitter after Musk’s takeover, saying that the platform will change now and that it wants to understand the direction Twitter will take.

If Twitter becomes a free-speech absolutist and the go-to platform for anyone to post about anything, no matter how controversial it may be, without any filter, brands and advertisers will walk away from Twitter, said Singh. “We can already see this happening as General Motors has suspended advertising on Twitter.”

Slow ad business

Advertising business that forms the bulk of Twitter’s revenue is not on a par with other social media platforms in India, said marketers.

“Expectation from Twitter is it to become more competitive than Meta-owned platforms. Twitter lags if you compare its India ad revenues with that of Meta. The reason is that in terms of ROAS (return on ad spend), Twitter does not command the same clout as Meta,” said Milan.

Advertisers say that while Indians use Twitter a lot, Indian marketers don’t pay to be on Twitter and that a brand can strike a deal to be on Twitter for an entire year for about Rs 8 lakh, whereas a top content creator for a post on Instagram charges lakhs of rupees. The average cost for a promoted ad on Twitter ranges between $0.25 and $2 whereas follower ads are about $2 to $4 per follow, noted Ashish Seth, creative head of ad agency Optiminastic Media.

Twitter is not a primary platform to advertise while platforms like Google, Meta and Snapchat have dominated the market with a larger user base in India, said Mehta.

“Twitter’s daily active users (DAUs) in India are lower, even though the active conversations on the platform make the most noise. Data-driven targeting offered by other platforms is stronger, which means that a higher ROI (return on investment) is available elsewhere,” said Devnani.

First Published on Nov 1, 2022 9:50 AM