The Oxford dictionary describes ‘Hullabaloo’ as “a lot of loud noise, especially made by people who are annoyed or excited about something”. Its synonyms - Commotion, Turmoil. While one can think of many ways to describe the current state-of-affairs at Twitter, this word comes pretty close to describing the recent and not so recent goings-on.
Now, while a lot has indeed taken place post the recent takeover, let us not forget the equally dramatic scenes witnessed by the world just a few months back. "Is Twitter dying?" billionaire Elon Musk asked in April, 5 days before offering to buy the platform. Then ensued the bid, then the reneging on the deal based on ‘fake accounts’, the claims, counter claims, the very public trial. Then comes the buy-out (forced, embarrassingly so), spats with top management, their subsequent exits, an open letter to Advertisers about the creation of a better Twitter for all, then the cute debate around the pricing of the revered Blue Tick (which began with a $20p.m fee proposal). And then out of the blue, the sudden announcement of the imposition of the $8 per month fee!
It goes on. Publicly.
This feels more like a soap opera, rather than a platform which the world’s richest man wants to be “maximally trusted” by its users and considers “important to the future of civilization” as a “common digital town square”.
Which brings us to the important question. Why this public hullabaloo? Was it needed? Especially for a business which is challenged on various fronts?
Low Revenue, Profitability: For all the attention it garners, primarily on account of the influence it exerts given the high-profile celebrities, politicians, media influencers etc who use it to express their unfettered opinions real-time, Twitter is a much smaller business compared to its competitors.
For instance, Twitter’s annual revenue in 2021 was $5.08 billion. Compare this to Google's $257 billion & Meta’s $117 billion. Or Twitter's 235 million active users vs Meta’s 3.65 billion. Not only this, in its 16 year history, Twitter has rarely been profitable. Its 2021 net loss was $221 million.
Slower Innovation, Decreasing Quality Users: Over the past decade, Twitter's core features have barely changed, unlike its social media counterparts who have made giant strides innovating & expanding their user base. User engagement has been low. According to a recent Reuters report, Twitter is struggling to keep its most active users, who are vital to the business, engaged. These "heavy tweeters" account for less than 10% of monthly overall users but generate 90% of all tweets and half of global revenue. Heavy tweeters have been in "absolute decline" since the pandemic began.
Issues around Free Speech, Content Moderation: The platform has been battling issues around Free speech, display & timely removal of hateful, harmful and potentially illegal content. It has struggled with identifying & removing child porn. There is also the case of addressing extreme harassment on the platform without delay. This has made users, advertisers very uncomfortable.
Wary Advertisers: This is perhaps the most critical of Twitter's challenges and perhaps the most perplexing - as to how this very public hullabaloo has not helped its case. Of Twitter's ~$5 billion revenue in 2021, ~90% came from its Advertisers. And it is these very Advertisers who are grappling with Musks over amplified, very public spate of announcements in the last few weeks. Not only this, there is an increasing aura of discomfort amongst Twitter's top spenders, given Musk's most recent hint on ‘loosening Twitter's content rules’, which could lead to a surge in misinformation and other toxic content. Such was its effect that in spite of Musk's clarification to prevent Twitter from becoming a “free-for-all hellscape”, the Ad giant IPG group asked its clients to pause all spending on Twitter till more clarity emerges on trust and safety. Its clients include large spenders like Coca-Cola, American Express, Johnson & Johnson, Unilever, Nintendo etc. More recently, big names like General Motors, General Mills, Pfizer, L’Oreal have also suspended their Twitter spends.
This could just be the beginning. Others will follow suit.
Responsible Advertisers go to extreme lengths to ensure ‘Brand Safety’ i,e ensuring the placement of their brand messaging in safe environments - free of hate, abuse, pornography and spread of misinformation with their ad dollars. This is of paramount importance. Advertisers also value ‘Stability & Consistency’ (read- a safe, stable harbour) from the platforms that they advertise on, not knee jerk ad-hoc implementations. And they are willing to pay higher for such stable environments. On both counts, there has been much ambiguity. Ambiguity fuelled by a public display of inconsistent statements, actions and reversal of long established rules.
Clearly, there is a lot to be done to make Twitter a better place. For consumers and for advertisers alike. It is a really good product, which can be made great. And probably who better than Elon, who is known to perform miracles.
But this needs to be done without all the noise, the ‘hullabaloo’. Because provocative public, glitzy, dramatic statements may be OK otherwise, but not when you’re running a 'serious' business, which Twitter undeniably is.
Sometimes being a ‘boring’ (read- stable,consistent,understated) business is underrated. But it delivers.
Jaskaran Kapany is an Advisor to Start-ups and former CMO of Xiaomi and head of marketing at Paytm. Twitter: @JaskaranKapany. Views expressed are personal.