Context to Twitter's 2023 advertisers issues
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I wanna know more about New Fronts.
Same deal for advertisers. The premium buys and the big space goes through heavy negotiations (but might be rtb’d for execution as needed)
I can only imagine some sort of middle man. But why would I buy ads through that middle man?
Everyone wants at least a little predictability...
The deals seem to be rather secretive, but from what I can tell bonuses can be anything from a straightforward discount, to a guaranteed amount of impressions for some campaign, to things like guaranteeing that the client will win a certain percentage of auctions above some price.
Somehow it’s got stricter and stricter to the point where satire articles get flagged.
I’m pretty sure Twitter has room to maneuver without advertisers caring.
The problem is advertisers demanding assurances when the company literally had a takeover last week.
There are no assurances ik a situation like this, which lets activists manufacture doubt.
Advertisers have the right to demand all the assurances they want. There are other places to spend ad budget. In this economic context there is extra pressure to make every dollar count. Advertisers care about brand equity and RoI. They don’t owe Twitter one dollar. It’s not the advertisers’ fault the takeover is so messy. It’s 100% of Musk’s doing. It’s not the activists’ fault Twitter had no good answers, irrespective of where the questions originated. And lastly, it’s not the first media M&A deal in history. Seeking assurances post-acquisition is boringly standard practice.
More importantly, the events this talk about were in May. That was when advertisers asked questions about future leadership and got no answers. Except what was on Elon Musk tweet feed. And Elon Musk vision as shown on his feed does not add confidence.
There thing are apparently bought a year in advance, so they think a year in advance. Twitter used to spend a lot of effort in order to ensure advertisers year after year. Musk thought it is unnecessary, so he did not. So now they are doubting because communication toward them changed.
Then, as Musk was firing ad accounts managers from Twitter, he had group call with ads who felt not being listened to. Combine it with being unsure who even to talk to, they did not bought again.
Advertisers are asking questions, and Twitter isn't providing answers or assurances. Therefore, advertisers are backing off.
This is completely down to Twitter being taken over by a guy who insisted for months that he would turn it into a "free speech" hellscape, and refusing to answer any questions about his policies. Policies which he seems to change based on the weather.
Twitter isn't providing any sort of assurance that the platform will continue to exist in a way that advertisers are comfortable advertising on.
Trying to blame this on a boogeyman labeled "activist" is pretty much nonsense. Musk has been completely reckless during the takeover, and these are the consequences of those actions.
I'm very curious what sort of questions these were.
Elon himself said that Twitter "cannot become a free-for-all hellscape", and so advertisers want to understand exactly what the plan is to avoid that given that (for example) Elon laid off 75% of the moderation team.
Pre-Elon, leadership spent lots of cycles building trust and confidence with advertisers, involving them in policy discussions, etc. That is not only no longer happening, but it appears that Elon is blocking people who are asking tough questions.
https://twitter.com/loupas/status/1588599808587345921
For anyone confused about motivations, this isn't about "wokeism" but is straight capitalism. In the same way that airlines don't want their ads to be placed next to coverage of an air disaster, advertisers and agencies need assurances that Twitter isn't on the road to becoming a cesspool, and that their brand/ads won't appear near harmful content.
Did he?
According to this BBC article[1], "Yoel Roth, Twitter's Head of Safety & Integrity, said that most of the more than 2,000 content moderators working on "front-line review" were not impacted" by the firings.
More details here[2], where Roth says "More than 80% of our incoming content moderation volume was completely unaffected by this access change. The daily volume of moderation actions we take stayed steady through this period."
Eventually there will be giant censorship service corporations lobbying government for more restrictions on speech, and for them to be more complicated and confusing (to make them more difficult to in-house.)
However, my personal experience of Twitter suggests that it remains an open air sewer, which tends to indicate that the content moderation team was already severely under-staffed. I suspect that it's even more true for non-English language.
So, even if only 15% of the content moderators have been laid off, this doesn't bode well for the future health of conversations on the platform.
Regardless, thanks for the sources!
update: Reading through the source once again, 15% of the T&S team was laid off but we don't have numbers for the number of content moderators who were laid off. I had assumed that content moderators were part of the T&S team, but that may not be true.
Or that they were moderating the wrong thing.
I’m pretty sure Twitter deprioritizes tweets from accounts similar to ones you’ve blocked.
Loud, blatant lies that are repeated by authority figures continuously is one thing. That this is bad is almost universally agreed on. But does this advertiser worry really stop at that?
I think this is a very interesting question, hitting at the heart of the Twitter controversy. Advertisers have an incredibly strong influence on contemporary discourse; their concerns influence almost all publicly-visible discussion, opinion and debate. The attention economy, eyeball-and-click-hunting is just the tip of the spear, and this dominates almost every public communication platform in the world.
Elon Musk and his $44 billion «fuck this shit» purchase is the only significant challenge to this model. It will obviously upset the advertisers; it’s tautological.
Maybe the result is that it won’t work, but if it does, Twitter will be the only public communications platform that isn’t very heavily influenced by advertisers’ interests.
Absolutely every fiddler that currently has an audience of non-negligible size is paid by a consortium of advertisers that have aligning interests. The strings, so to speak, all pull in the same direction. This is largely invisible, since everyone must play by these rules. TV, newspapers, social media. Audience of 5 billion. We do complain about polarization, clickbait, negative emotion amplification and dark patterns a lot, but we accept it as the economic laws of gravity. Shareholder duty cements this. It molds our entire society.
Elon Musk has removed Twitter from this regime, by burning 20 billion dollars and stating a willingness to burn the remaining 24. Assuming he can make the economics work out, Twitter will be the only global media platform that doesn't have to bow to the advertisers' every whim.
A lot of the contention comes from the fact that if this succeeds, Twitter will no longer have to follow the moderation- and censorship rules that advertisers have quietly implemented everywhere else. This might apply to the extremes that the majority want to censor (whether sensibly or not), but it also applies to lots of discourse that vocal minorities wants to censor.
Regardless of whether one likes this development, it's super interesting.
Alternate proposal: you got your point across and people disagree with you.
Any ideas for how he's going to keep the lights on at twitter? Your suggestion that advertisers fleeing the platform is a "free speech issue" is highly questionable. What remedy would you propose? Forcing advertisers to spend, and how much should the government force them to spend, propping up political speech they disagree with?
Boycotts are protected speech. Even if you find that speech deplorable.
I'll boil it down to just a couple of sentences: It's a democratic problem that 99% of all public discourse is subject to veto and policy from advertisers and payment processers, and the drive to maximize income from these. Even if you disagree on everything else, at least the consequent polarization should be bad enough to concede this point.
Solution? Well, obviously the advertisers are free to do what they want, but that doesn't make their pervasive influence any smaller. A problem doesn't disappear just because solutions are elusive.
My guess is that Musk wins the battle of the wills here; he no longer needs to maximize advertiser income, just get enough to make the wheels turn. I wouldn't bet the farm on him resolving the issues I've highlighted; he's far too mercurial to have any confidence on that. But he does have a shot, as opposed to everyone else.
In the sense we don't want to fund actual public places for discourse online and instead have pushed this off to private servers ran by private companies, yes. When a large portion of the voter base says "reduce taxes beyond all else" don't expect funding to show up for this. More so the advertising industries are also apt to fund political campaigns so it's unlikely most politicians are going to go out of the way to change status quo. And in that sense the average user is going to be aligned with providing most online interactions as 'somewhat' safe spaces until safety is not aligned with their political sensibilities.
I personally don't think that Elon is going to do much other than crash the value of Twitter and lose and epic amount of cash doing so. It's possible that the whole ordeal may push more people to federated social media, but it seems to unlikely to do so in numbers that matter.
If you were an effective altruist worried about adtech's pervasive influence on society and had unlimited funds, you could hardly do better than purchasing one of the few established, global social networks. Trim down its cost structure to the bare minimum, make the economics work without letting the global-reach advertisers dictate terms, preserve the network effects that comprise the real value of your media channel and then shape the discourse to serve whatever positive outcome the current system prevents. You'll have the only privately-owned, global-reach media channel in the whole world that's not fundamentally influenced by advertisers.
Of course, Elon Musk might not be an effective altruist and the billion-dollar interest payment is an impediment to the above plan, I'll grant you that. But hell, I wouldn't be surprised if the guy just ends up subsidising this thing from his other businesses if he can't make it run organically. That's what I would do. It'd be a uniquely independent and influential media channel.
I really don't see why this would make people quit Twitter en masse. The only people quitting Twitter are those who really hate Elon Musk, and there just aren't that many of them. The service works like before and it might well work better, allowing democratic discourse that is viable for a global audience nowhere else.
As I mentioned earlier, the conclusion boils down to whether you think Musk means well or not.
In practice, a site with user generated content from millions of users and a shoestring budget is an unmoderated, spam-laden shithole. Or, you can leave the moderation up to AI which permanently bans people for arbitrary and inscrutable reasons. Neither of these outcomes is appealing to the general public.
If you think advertisers are your biggest problem then I'll have to tell you about governments. Piss off the EU with privacy issues and you'll be fined. Piss off Russia/China you'll be banned. Don't keep some level of control over the violent threats US posters are making and you'll be civilly sued as an accessory.
And you're still going to spend a massive amount of time and effort banning crap if you want any of your user base to hang around, lest you just create the next 4chan (which even does a fair amount of their own banning).
If you think Musk is going to defeat capitalism to the point that commoners are heard in the town square, unfettered by the wants of advertisers and media conglomerates, I'd say your chances are better praying that his next venture is a moonshot for time travel, destination circa 1600. Or before: one of the first tunes I learned on the violin was an advertising jingle popularized around then.
No, Musk doesn't want the commoner to be heard. He wants his opinion to have center stage. He's certainly not going to undo the grip that capitalism has on the public sphere. He's just another moneyed elite.
But with a fleet of rockets.
Twitter now has to pay $1 billion a year in debt servicing costs. Twitter was not wildly profitable before, so it seems very unlikely Musk can make enough money to break even, much less profit, while losing a large portion of advertising revenue.
That's why he's trying cut costs so aggressively, and rushing to gain new subscription revenue.
Yes in the sense that capitalism isn't and will never be a "fair" system as anyone who participates in it may perceive it.
There's a point where any economic system can erode its political cousin whether that be capitalism, socialism, or communism. To me, all you're saying is what others before you have said: we have too much weight in the capitalism category these days. I think most people probably agree with that.
Twitter was hardly profitable before, and now it is loaded with more debt than ever. If at all, he needs to sell more ads, not less.
The problem is in reverse. Cable news and then Twitter artificially created this idea that a public international town square was a good idea and then decided the need to fund it.
Really the Democratic problem is that over the past 30 or so years we’ve flipped the pyramid from focusing on local news and communication to focusing on national and international news and communication. And that is much more expensive to operate.
Advertisers have free speech right to not do business with Twitter. They have right to not do business with me too. Just like Musk has right to fire people from his company.
Free speech means also freedom to criticize twitter or disassociate from it when you think it affects your business.a
Yep. How many major companies do you recall advertising on 4chan?
The underlying assumption is that slackivists will actually put their money where their mouth is. The Chick-fil-A boycotts did absolutely nothing to their sales and I suspect the same would be true for any company that people call out for advertising on Twitter. I seriously doubt that there are very many consumers will genuinely care where a company allocates its advertising dollars.
I'm actually politically left, but the reason I care is that I hope that this forces the left to actually act outside of being angry on the internet. As much as I disagree with conservatives, I have to applaud that they actually take meaningful political action (e.g. volunteer as poll watchers because they believe in election fraud).
Brand image is extremely important. You most definitely do not want most brands appearing close to shitty content.
You have the same thing with physical advertising where brands will refuse their ads in some places if the perception of the space is too bad (ex: homeless people around, drug traffic...). The reason is that even if you might be interested with the brand you will now associate it with the environment you were presented it with.
Of course for Lidl it is less of a worry, but even low price brands have standards and don't want to be anywhere near a nazy content.
I am not sure how that will play out but I wish him well (as someone who is not a major user of most social media)...
I would say the conversion rate would be closer to 0.2% for Twitter assuming the best scenario since it doesn't really have a content model and there's no incentive for good publishers to participate. This will give Elon precious ~$30M ARR at the cost of pissing advertisers off. Oh and don't forget that Elon still has to pay $1B just for annual interests.
Perhaps they could turn @elonmusk to a protected account and offer paid $8 subscription per month for "super follow" or whatever. Maybe it's a better monetization model given Elon's significant influence to the crypto market... :sigh:
Given the bots wont add to revenue, you need to up the $8 a month to $160 a month and have every single user pay which seems enough to bring in $1B in revenue per month.
These additional revenue is in response to the extra $1B yearly in interest payments, not to replace advertisers.
Losing all these advertising commitments are real damages Twitter could point to in court and make Musk pay on top of the $1B break up fee even if the court decided not to force the sale.
Especially block.
Apparently it represents only 10-15% of the ads for a year, so just a bit more than a month.
Not only that but the fact that it isn't pre-sold due to uncertainty does not mean that it won't be sold later, during the year, when (if) advertisers see that Musk's Twitter isn't that awful after all.
I also imagine that the budget of advertisers that doesn't go to Twitter doesn't necessarily or fully go to other platforms.
Advertisers that wanted to reach Twitter users in 2022 most likely still want to reach Twitter users in 2023, so I'm not convinced that they won't end up giving that money to Twitter anyway during the year.
I wouldn't invest a single dollar in Twitter at the moment (we can't anymore anyway), but this honestly doesn't seem to me like something apocalyptic for them.
On top of that, Ads aren't 100% of Twitter's revenue, it's 89%. And that's without the new blue checkmark.
Yeah, no big changes happening at Twitter currently. Everything stable and normal.
One can decide that Twitter is in a good or bad state but I think one should want a strong foundation rather than relying on faulty analogies.
Yeah. Companies typically come into the year with budget allocations. Some percent of that is going to upfronts / presold, for which you get a discount.
Twitter has a not-particularly compelling product. The dollars that Twitter lost almost surely got committed elsewhere.
It doesn't just represent that. It also gives an indication of how advertisers more generally are thinking about where they want to run their ads in the coming year. Which might make it a rather good crystal ball for guessing what will happen with the other 85% of the year's ad revenue.
I'm quite sure Musk was expecting this outcome, despite the PR said otherwise.
It's like complaining that Trump failed to make America great again, like that was really his plan.
Or that, in my Country, Berlusconi did not deliver the "liberal revolution" he promised.
They are not there to make anything great, their great plan is to boost their ego, fix their problems, skip jail, and nothing else.
Big businesses have an interest in stability (business as usual is predictable) and in being left leaning (pretend to care about people, lobby politicians to lobby for policies that entrench you in a position of power), it's to be expected they won't like change and that they won't like Elon.
I don't think Elon cares too much tbh, he's obviously going to pivot Twitter into something like Line in China which does everything. I'm half expecting payments with crypto soonish.
Trump biggest mistake was not to decrease public spending. You can't really scream at big government while doing exactly what your opponents are doing. He was decent policy wise and was positive for the economy. Overall he did much better than I expected out of a reality show contestant.
Berlusconi did some good things policy wise but ended up facing a system that doesn't want to change. Italy doesn't have any hopes of redemption. The government is designed so that radical change is impossible (it's different in the US). Italy will keep on piling on debt until the government completely chokes the entire population and the country collapses.
Trump and Berlusconi share a lot. Elon is crazy in his own way and pretty different.
Of course you can, it has been the republican modus operandi for 40+ years now:
https://en.wikipedia.org/wiki/Jude_Wanniski#The_Two_Santa_Cl...
https://www.commondreams.org/views/2009/01/26/two-santa-clau...
as Italian: Berlusconi is a convicted felon who got into politics to fix his problems with the criminal law and mostly succeeded. he was the first one not wanting to change anything in Italy. He basically stalled my Country for 25 years, because that system got him where he is today. Only a fool would kill the golden goose.
Trump is trying to do the same.
it's not a judgment on their political affiliation, which I oppose, but that's not the issue here.
the issue is they are very bad men, with very bad ideals, not surprisingly both of them admire dictators and totalitarian leaders.
Berlusconi is still bragging, still today, about his close friendship with Putin.
Musk is just not a political leader, yet, but as a influencial personality in the tech space his behaviour has been not very dissimilar from the other two.
Using his influence to convince people to support things that would only benefit him? check
Bullying competitors? (via twitter) check
Bullying critics? (via twitter) check
addressing other leaders like a tugh in a street fight? check
seriously, this happened for real! (facepalm emoji)
https://twitter.com/elonmusk/status/1503327421839417344
etc etc
Having said that: one thing is gonna be interesting.
If Elon Musk succeeds to relieve Twitter from his reliance on ads and convince enough people to actually pay for the service, making it a real product, that would make him a great entrepreneur with very bad manners, but still a bad human who is gambling with people's lives and careers just to prove a point.
i see the backlash against Musk is already at the “Trump”, “jail” levels. it’s quite funny to see so many people lose their mind over something that is of no real importance.
Musk is not at Trump level, but he already had his allegations that he called "political attacks" and that his company settled to silent them.
Doesn't mean he did it, but he surely doesn't like to be on trial.
HN does sometimes position itself in opposition to Reddit. Nothing wrong with Reddit, of course, just that Reddit does thing sone way and HN does things another. And snarky low-value comments are one of the things that Reddit does and HN does not.
But: because HN doesn't generally do them, you can sometimes get away with the odd one, if it's timed right. Personally, I upvoted this one.
I feel like I should hit the 10k karma point and bail out of here. I definitely do not fit here ideologically, politically and intellectually anymore.
I personally stopped using Twitter, try to limit the scope of my engagement on Reddit, and am trying to read more of what I would consider reputable sources of information instead of ‘going to the comments to get the real facts’. I’ve found using RSS and just reading articles (rather than going into the comment section to get takes) has been somewhat helpful.
Also just disconnecting every once and I while is helpful. But it kind of feels like I personally am addicted to the information…so that can be hard.
Sorry for the rant, just wanted to share what I have found somewhat helpful. Cheers
For people that are captured by this form of thinking, everything is framed in for or against terms. If something or someone can be placed, even conceptually, as against their side; they fail the purity test or make a decision that isn't strictly kosher, well then every single thing they do needs to be hyper analyzed, then framed in a dispassionate if not fully negative perspective.
Like you, I'm getting very tired of this discorse. I'm sure for people who view things this way it can be exhausting, as you constantly have to be reframing everything in ever evolving terms of political doctrine. I don't think this will last. Ordinary people are getting tired of it, and I think these puritans are starting to get real pushback in the open. A totally anecdotal opinion, but hopefully one that resonates a bit.
In anycase I think the best thing we can all do is try our best to be objective, compassionate, and nuanced when evaluating people or events. Life is complex and its elements don't fit into a binary of good and evil.
The illustrative Calvin and Hobbes comic at https://tvtropes.org/pmwiki/pmwiki.php/Main/IMeantToDoThat demonstrates the principle rather well.
Then he realized it was not in fact a good idea and backed out of it.
I think that's a more likely scenario: much like the hypothetical football fan, in a fit of zeal he said, "I could run this better!" If the goal were simply to flex his bank account, there are so many better ways he could have done that that I think we could safely assume he would have picked one of those instead. He may not be as smart as he thinks he is, but he isn't stupid.
So my point is not that he doesn't want it to succeed, it would obviously be a great personal embarrassment. It's that the risk of destroying a community of millions of people was clearly lower on his mind than the power trip of how cool it would be to own Twitter. He can afford to not care, and that's a deeply depressing situation.
The special industry event where many companies sell and buy ads a year in advance at discount is the context I did not had and many people did not had.
their ads are just being shown to bots right elon?
This puts Twitters losses over the next year at nearly $2,100 million by my count. It's no wonder that Elon feels the need to fire everybody.
This year, Twitter got nearly none at all. Therefore, Elon gets angry.
This happened after musk claimed that twitter was defrauding advertisers.
If it turns out ad money is just being flushed down the drain because most of the views are in fact bots, as I suspect, then Twitter has a whole other challenge.
But Elon simply blew up the foundation they've built just within a week and now he's blaming "activists" for "advertiser boycotting". But in the reality, it is just a really good justification to pull off advertising budgets from Twitter since it's been largely "experimental" and ad agencies don't want to be blamed for any uncertainties from this leadership change. And you know, everyone want to be as frugal as possible these days and digital ads is a kind of soft budget...
And the ads are placed on the feed not on a piece of content (like the issues youtube was having).
Elon should just deploy a "woke bubble" option where your ad is sandwiched between posts from two liberal elites. The audience would still be broad as just as many people follow these people to laugh at them as to support them.
The reality distortion field behind opinions like this is truly bizarre. Trans makeup artists got demonetized on youtube by the same advertising industry. The vast majority of advertisers don't want their ads shown next to anything remotely controversial. They don't want a "woke bubble" they want a "broadly palatable platform."
If your feed is mostly QAnon and you like that, advertisers aren't going to "reach" you in a woke bubble. If twitter becomes an unmoderated cesspool, that's the userbase, and it won't attract the "general audience" that advertisers are after. Even if free speech means twitter must host all user-generated content, it still doesn't mean you can force normies to read it.