Elon Musk buying Twitter makes advertisers 'anxious'

Elon Musk’s Twitter ownership is giving advertisers serious pause about the platform’s future, and some brands are asking their agencies for advice on whether to even stick with the messaging platform, according to multiple ad execs.

Musk reached a $44 billion deal to buy Twitter yesterday, which threw a wrench into the world of media and advertising, just as Twitter was heading into the key ad sales season known as NewFronts. “Fuck,” said one top marketing exec, when hearing the news about Musk. The expletive basically sums up the feeling among many in advertising: Marketers are worried that Musk will reopen the floodgates on uncivil behavior on the platform. Musk is seen as somewhat of a wildcard for brands; the billionaire views Twitter as a “town square,” where speech should be relatively open. But advertisers hope Twitter doesn’t become more like a bathroom stall under his watch. In recent years, Twitter’s leadership has taken a number of steps to help make brands feel somewhat safe on the platform, working with industry groups like the Global Alliance for Responsible Media to set guardrails. 

Another major ad agency executive, who works closely with Twitter, said that brands were reaching out to the agency yesterday to get a “point of view” on how to proceed on Twitter. “It suggests that advertisers are anxious and are prepared to stop spending,” the agency executive said.

So what’s the big deal if Musk owns Twitter? Well, the social media platform has gotten credit in recent years for addressing harassment, bullying and hate speech. Whereas Facebook, which now goes by Meta, was criticized by civil rights groups over the prevalence of hate speech and disinformation on the service, Twitter was often praised for listening to brands. Twitter’s leadership team was credited with taking proactive steps to combat the worst abuses.

“How does Musk’s take on ‘free speech’ play with things Twitter already set up to keep the platform safe,” a third ad agency executive said.

A number of advertising leaders spoke with Ad Age on the condition of anonymity because they were not authorized to speak publicly about the situation. The moment is a sensitive one for Twitter and marketers, which are all trying to figure out what’s next for the platform.

Twitter has made a number of policy decisions in recent years to cut down on hate speech and discrimination. Those policies are in doubt because Musk has said that his interest in Twitter was to allow more forms of speech to flourish. Twitter was the first social media platform to ban former President Donald Trump, which his political opponents saw as a necessary step to counter disinformation and harassment. Conservative politicians have gone after Twitter for what they claimed were biased decisions against their views. Musk’s winning bid for Twitter is expected to put the company in his private hands by the end of the year.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a press release announcing the deal. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential—I look forward to working with the company and the community of users to unlock it.”

In May, Twitter is supposed to host a digital content NewFront, the annual event produced through the Interactive Advertising Bureau, where platforms pitch advertisers, looking for big upfront ad commitments. In June, Twitter is set to send its ad sales team to Cannes, for the annual creativity festival. Advertisers are worried about a more adversarial relationship with Twitter’s combative new owner.

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It’s unclear if Musk’s views will overlap with the work Twitter has done with advertisers over the years.

“Advertisers are now questioning, OK once this goes through, what are the changes that are going to be put in place,” said Marla Kaplowitz, president and CEO of 4A's, the advertiser trade group. “And what is the track record for someone like Elon Musk to deliver on that.”

For instance, Twitter has been working with the Global Alliance for Responsible Media, an industry group. The group has come up with a working definition of “brand safety.” GARM tracks about 10 content categories—like adult content, violence, human rights, piracy, obscenity and hate speech. Moderating these categories does not always jibe with absolutist free speech principles.

“There are serious implications for the advertising model and the environment on Twitter,” Kaplowitz said.

The questions have some merit given Musk’s own penchant for using Twitter like a veteran troller—just last week he went after fellow billionaire Bill Gates, who had been shorting Tesla stock. Musk posted a picture of Gates to Twitter with a vulgar reference.

Advertisers are questioning whether Musk will even care about the advertising community, given his record of disinterest in advertising at Tesla.

“I don’t think advertising factors into this,” said a top executive at a media holding company. “There’s almost no discussion of advertising when he talks about Twitter. He’s not buying it for cash flow or revenue, he’s buying it because it’s a town square.”

Twitter made about $4.5 billion in ad revenue in 2021, and the company had set a goal of reaching $7.5 billion in 2023. Brands have become comfortable on the platform as a way to communicate with followers, launch new products, discuss trends of the day and conduct commerce.

Related: Ad spending is decreasing—and more cuts may be coming

But Twitter's ad revenue still pales in comparison to other social platforms. TikTok's ad revenue is expected to triple this year to $11.64 billion, that compares to $5.58 billion for Twitter. 

There is another constituency that has been made uncomfortable by Musk’s ownership of Twitter—the employees. A number of people close to Twitter said that workers were concerned about Musk’s track record at Tesla, where the company had been successfully sued for discrimination against Black employees.

Twitter’s leadership has received credit for building a more inclusive work force, and on Monday some people worried for the executives who helped shape the company. Black Twitter, too, is a vibrant community of avid users, who have formed camaraderie around social justice issues. “Given all of the Tesla racism and discrimination,” said one Black agency executive, who spoke on condition of anonymity, “Musk taking over Twitter, a place where communities of color feel a little heard and free, is a shame.”