Twitter used to be the go-to place for major brands to promote new products, respond to customer complaints, and hone their image. But after less than three weeks of ownership under Elon Musk, the social media service is now seen as “high-risk” by one big ad firm, with other big brands still paying their bail.
Luxury fashion brand Balenciaga deleted its Twitter account this week, the latest known company to withdraw from the social networking site amid a litany of problems under Musk’s leadership. Eli Lilly pulled her ads from Twitter after a fake account tweeted that she was making her insulin products available for free, According to to the Washington Post. This fake tweet sent Eli Lilly’s stock down and refocused on the high price of insulin.
And the world’s largest media buyer, Group M, is now warning its customers that Twitter advertising is “high-risk,” Group M officials have confirmed. Group M is working with brands like Google, Ford and Coca-Cola to buy ads in media services, accounting for 1 in 3 ads worldwide.
Twitter’s arc of transformation since Elon Musk bought the company on October 27 serves as a cautionary tale about how hubris and quick decisions can undermine a company’s core business – in this case, advertising. Musk wants to increase revenue from subscriptions to the service, but Twitter still relies on ads for 90% of its sales. So far, his leadership is risking Twitter’s $4.5 billion in annual advertising revenue from big names like Eli Lilly, Oreo and General Motors.
“Corporate America is very, very upset,” said Eric Yaverbaum, CEO of Ericho Communications and a brand and public relations expert. “They’re talking about it behind closed doors: ‘How are we going to handle this? Do we want to participate?
He added that Twitter had become “the wild, wild west.”
Many major advertisers have paused or withdrawn their Twitter ad revenue amid confusion over Musk’s plans for blue service tags – which used to mean an account was verified – and.
Playbill, a news site and guide for the Broadway theater community and theatergoers, on Fridayleft Twitter as the social media platform has “greatly expanded its tolerance of hate, negativity and misinformation.”
Advertisers, among othersAllianz, Audi, General Mills, GM, United Airlines and Pfizer have paused their advertising on the platform, leading to for company.
One of Twitter’s most damaging branding incidents occurred on November 10, when an account posing as Eli Lilly’s corporate account — along with a newly purchased blue “verified” checkmark — tweeted: “We’re thrilled to announce that insulin is free Now.”
Eli Lilly: ‘We’re working to rectify this situation’
Eli Lilly’s fake account looked real enough that the fake tweet sent the company’s stock down 4.5%.
At the heart of the problem is Musk’s new business plan for generating more subscription revenue: turning the current free “blue checks” that signify account authenticity into a payment service available to anyone.
This has opened the door for pranksters and scammers to pay $8 a month to place a “verified” blue check next to a fake Twitter handle and then impersonate another person or brand. Along with the Eli Lilly spoof came fake accounts imitating Tesla, Lockheed Martin and Nestle, among others.
Following the fake insulin tweet, Eli Lilly’s real account issued a clarification: “We apologize to those who were given a misleading message from Lilly’s fake account. Our official Twitter account is @Water lily“.
Eli Lilly management then paused all Twitter ad campaigns, According to to the Washington Post. When asked by CBS MoneyWatch if it had suspended Twitter advertising, the drugmaker said: “Lilly’s fake/parody Twitter accounts have been spreading false information in recent days and we are still working to rectify this situation.”
For his part, Musk promised to improve the situation. On Sunday, he tweeted: “Twitter will enable organizations to identify which other Twitter accounts are actually associated with them.”
Musk: Activists are destroying ‘free speech’
Meanwhile, Musk is blaming the activists he claims are terrifyingas he moves fast to put his mark on the social media platform.
“Extremely mixed up! They are trying to destroy free speech in America,” Musk said in a November 4 tweet.
But brands are pulling back from Twitter over concerns about losing their credibility on a platform where scams and hate speech are on the rise. Musk’s business decisions regarding his back injury are also worrisome for brands that value stability and predictability. When it comes to free speech, the First Amendment applies only to government control over speech. Private companies are free to make their own decisions about how and where to spend advertising money.
“Elon can’t blame anyone but himself right now,” Yaverbaum noted. “The rules change from day to day, and that’s not what brands want.”
Group M, the world’s largest media buyer, said in an internal document that several things would have to change on Twitter to reverse the “high-risk” label, According to Digiday, which published the document. He noted that Twitter would need to rehire senior IT security, privacy, trust and security staff, as well as establish internal checks and balances.
He also wants “full transparency” on content moderation development plans, community guidelines, and anything that affects brand safety or user safety. He also wants involvement in content moderation and enforcement against fake accounts.
It’s not too late for Twitter to stabilize and convince advertisers to come back, Yaverbaum noted. “There are a lot of people who just hang around because they love Twitter,” he said.
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