Twitter whistleblower casts new doubts for advertisers in Elon Musk saga

The Twitter whistleblower has raised new questions for advertisers who are concerned about brand safety and bot activity, adding fresh doubts to Twitter's internal workings amid its continued battle with billionaire Elon Musk. 

Peiter Zatko, who worked for Twitter for two years until this past January, made claims Tuesday that Twitter has lax internal security measures, and he seemed to back up Musk over how many bots get through Twitter’s systems. Zatko was fired for “ineffective leadership and poor performance,” a Twitter spokesperson said by email. “What we’ve seen so far is a false narrative about Twitter and our privacy and data security practices that is riddled with inconsistencies and inaccuracies and lacks important context.”

“Mr. Zatko's allegations and opportunistic timing appear designed to capture attention and inflict harm on Twitter, its customers and its shareholders,” Twitter’s spokesperson said. 

Attempts to reach Zatko for comment were unsuccessful.

For advertisers, the latest allegations have added to the already precarious position Twitter finds itself in with brands. 

“For those marketers who are not already relying on Twitter as a core partner, this may be an additional datapoint they consider as they deliberate where to make their next advertising investments,” said one digital advertising executive, who works closely with Twitter. The executive spoke on condition of anonymity.

To add to Twitter’s troubles, on Wednesday, a June letter from the U.S. Securities and Exchange Commission was made public. In it, regulators asked Twitter CEO Parag Agrawal to account for how Twitter measures its daily user rate and combats spam bots.

Advertisers are concerned that the Musk saga is stalling Twitter’s work on long-standing problems, such as creating safety mechanisms that could keep brands from appearing near inappropriate content. For instance, Twitter is still in the preliminary phase of an audit of its brand safety standards through the Media Rating Council, a process the company started more than a year ago. “We’ve gone through a couple of pre-evaluations with Twitter,” said George Ivie, CEO and executive director of Media Rating Council. “But we have not progressed with an audit of really anything yet.”

The Media Rating Council is one of the industry bodies that can help analyze when a media platform abides by standards, like those around “brand safety.” MRC can certify when a service has guardrails that prevent brands from appearing near offensive material like hate speech and sexual content. The MRC also analyzes valid traffic and ad viewability standards, which are all subjects that are being dredged up in Musk’s mud-slinging against Twitter.

Advertisers are not so concerned with bots on Twitter, in terms of being worried about fake accounts forcing them to pay for media that was never actually seen. However, how a platform deals with bots says a lot about the overall health of that platform.

David Gunzareth, senior VP and associate director at MRC, said that digital platforms have to have good security mechanisms for their audits to even work. “A major piece of our auditing of all digital properties have to do with internal controls … we audit that hard,” Gunzareth said. Bots can interfere with advertisers' organic activity on social media. Brands often analyze platforms to understand consumer sentiment, which can be manipulated by bots. Also, if a platform has a reputation for mishandling bots, it can factor into advertisers' plans to spend with that platform.

Twitter’s spokesperson said that the company was making progress toward its plan to attain brand safety accreditation. The spokesperson also pointed to work that Twitter is doing with DoubleVerify and Integral Ad Science, which are third-party firms that work with brands to measure media quality on digital platforms. Twitter will conduct brand safety reporting through those services, the spokesperson said.

So far, advertisers seem to be giving Twitter the benefit of the doubt, even though Musk has been attacking the company from every angle, including on its own platform, through his popular Twitter account. Musk has been trying to back out of a $44 billion deal to buy Twitter by promoting the alleged problem with bots. The two sides are set to face off in court in October. Twitter is trying to enforce the deal that Musk made to buy the company, but in the meantime, it has suffered a series of public relations setbacks as it has to defend the company against Musk.

The whole case has become a confusing one for advertisers, many of whom were initially wary of Musk coming in to take control of the company when he first decided to make a play for Twitter. Advertisers were some of the most concerned that the billionaire could degrade brand safety controls in favor of more permissive attitudes toward unfettered speech.

In its latest public report for the second quarter, Twitter disclosed it has 237.8 million “monetizable” daily active users, which represents the audience open to receiving ads on the platform. Twitter has long maintained that spam bots, or fake activity, make up about 5% of its monetizable daily user count. Advertisers are not so concerned with Twitter’s monetizable statistics; they are more concerned with actual results from ads—whether the ads lead to more awareness for the brand or sales of products. Those are measurable outcomes that bots can’t fake, according to Marla Kaplowitz, president and CEO of 4A's, the advertising industry trade group.

Kaplowitz said she has met with Twitter leaders in recent days to discuss topics like brand safety, which ties into the MRC audits. Twitter also is working with the Global Alliance for Responsible Media, an industry body that is working with digital platforms on topics like how to moderate hate speech, harassment and violent political rhetoric.

Musk has become a sideshow to the work that advertisers are trying to do with Twitter. “Clearly, it’s been a massive distraction,” Kaplowitz said of Twitter’s legal battle. But Twitter has been rolling out new technology that would make bots even less of an issue for brands, Kaplowitz said. For instance, last week Twitter announced upgrades to its conversions platform and pixels, which are tools for advertisers to measure the effect of their media. Twitter is making changes to its platform to capture more “performance marketing” dollars, which are ad campaigns with goals like selling products and generating customer leads, not just building awareness around a brand. 

An ad agency executive, who spoke on condition of anonymity, said that Twitter representatives have been “very proactive” reaching out after the whistleblower report emerged this week. The exec said the whole fight with Musk, and now Zatko, “feels very nasty.”

But in general, in the past few months, Twitter’s ads team has been “very collaborative, coming with ideas and opportunities.”

The exec pointed to the new performance measurement tools and new shopper advertising products, such as livestreams that allow brands to sell products through videos.

But bots, the main point of contention in the court fight with Musk, have not been an advertising problem, this agency exec said.

Musk has tried to make bots an advertiser issue, though, and just last week Musk’s legal team subpoenaed DoubleVerify and Integral Ad Science. While those firms could help advertisers understand when ads are viewed on Twitter, they would not have much expertise into how Twitter measures bot activity overall.