The Hill reports that "fifty of Twitter’s leading 100 advertisers have stopped advertising on the site as of Nov. 21, according to a recent report from the left-leaning media watchdog Media Matters for America … The 50 companies that halted advertising on the platform accounted for more than $750 million in spending on Twitter in 2022 and almost $2 billion overall since 2020."
The story points out that the abandonment of Twitter by these companies - which include Chevrolet, Chipotle, Ford, Jeep, Merck and Novartis, as well as a number of "quiet quitters" that stopped or slowed down their ad spend there but didn't make a big deal about it - coincides with Elon Musk's $44 billion purchase of the social media site, which has raised concerns about content moderation.
The Hill writes that "Musk laid off about half of Twitter’s workforce in his first week, claiming he had 'no choice' amid the company’s poor financial condition. Several hundred more employees resigned in mid-November when Musk gave them an ultimatum — commit to a 'hardcore' work environment or leave.
"The billionaire has also made changes to the social media platform itself, unsuccessfully attempting to roll out a paid subscription service for Twitter’s blue check verification and reinstating former President Trump’s account. Musk has also indicated that he plans to reinstate other suspended accounts in the near future."
- KC's View:
It seems to me that the concerns about Twitter's policies are well-founded. After all, the company currently seems to be managed by someone who, while admittedly brilliant and innovative, also has all the impulse control of a third grader who has consumed way too much sugar. This has led to an environment in which he seems to have sacrificed strategy in favor of visibility - Musk seems willing to do anything for a headline, even if it means giving air to things like hate speech and anti-semitism.
To be clear, Twitter is now Musk's company, and he can do anything he wants with it. He paid for the privilege. In fact, way over-paid for the privilege. But that means companies that traditionally have done business with Twitter can do what they want to do, too. (I've gotten a number of emails suggesting that Musk is making progressives crazy. This may be true, but he's also offending a far larger constituency - people who decry hate speech and anti-semitism. At least, I think it is a far larger constituency.)
Musk currently is taking on a more formidable opponent - Apple.
The Wall Street Journal reports that "Apple and its Chief Executive Tim Cook have the ability to hold great sway over Twitter’s potential success, as the iPhone maker is a major advertiser and tightly controls the software on its App Store.
"In a string of tweets accusing Apple of stanching free speech and claiming that the tech giant had threatened to kick the Twitter app off the iPhone, Mr. Musk introduced a new wrinkle in Apple’s efforts to maintain control over software distribution, acting as a megaphone for critics who say the company holds too much power through its App Store.
"By calling attention to Apple’s role as a gatekeeper for the App ecosystem, Mr. Musk is picking up the mantle in the yearslong fight developers have waged against Apple and its fees. Mr. Musk could bring new focus to the company from lawmakers and regulators around the world, including politicians who have expressed concern that Silicon Valley is silencing conservative voices."
And the New York Times writes:
"Mr. Musk has been poised to confront Apple since taking over Twitter. His business plan is predicated on shifting its revenue from a dependence on advertising to a greater reliance on subscription sales. But any new subscription revenue will be subject to Apple’s practice of taking as much as a 30 percent cut.
"Mr. Musk’s complaints also come at a pivotal time for Apple. There’s a push in Congress during the final months of the year to advance a series of antitrust laws. Among the bills under consideration is the Open App Markets Act, which seeks to give developers more control over their apps and allow them to skirt the fees that Apple and Google charge."
Seems to me that while Musk wants to do what he wants with Twitter, he really doesn't want other companies to enjoy the same privilege.
One of the things that Musk wrote on Twitter (natch) was that Apple “has mostly stopped advertising on Twitter," and then he asked, "“Do they hate free speech in America?”
Memo to Musk: Not advertising on Twitter is every bit as much about free speech as advertising on Twitter. I exercise free speech on MNB every day when I choose - freely - what to say and what not to say.
(Quick memo to anyone pulling their ads from Twitter: You can find a non-toxic, civil, content-moderated home here on MNB. Just sayin'.)
I'm no expert, but it seems to me that Apple's 30 percent cut on App Store revenues is the company's margin - it gets to set the terms based on what it thinks the market will bear, in the same way that every retailer sets margins based on what seems appropriate and acceptable. Now, Apple's market power may give it an unfair advantage, and it is possible that in the long run it will have to reduce its App Store margins. But it also is ironic that Musk seeks regulatory redress in a way that he almost certainly would resist if it were aimed at him and Twitter.
If I were running a brand, I'd stay as far away from Twitter as possible. The potential for collateral damage is just too great.
It is like the old joke about why it never makes sense to wrestle with a pig - you both end up filthy, but the pig enjoys it.