Twitter advertisers say they are concerned about Elon Musk’s tweets and actions

Elon Musk held a giant conference call for advertisers and over 100,000 other people today. He seemed thoughtful about his plans for Twitter, unsure how it would all work out, but eager for feedback. “I got the keys to the building last Friday,” he said, adding later, “I’m open to ideas.”

The problem for Musk is the Advertisers you’ve scared off as Purchase of Twitter for 44,000 million dollars you are unlikely to be swayed by any of this. They tell me they don’t care what Musk says on disclosure calls like this. They care about what he does and what he tweets.

This is a new problem for Musk, who became the world’s richest man selling electric cars and building rockets, and not caring what other people think of him. Or, at least, not caring what controversy-hating advertisers think of him.

But now he has a lot to do. At the moment, advertisers are Twitter’s entire revenue stream, and they’re not happy with Musk. If you can’t change that, you’re in big trouble.

And while Musk has done some really impressive things in the past (fueling the electric car movement with Tesla and private spaceflight with SpaceX), Twitter is a different animal. While Musk seems to think that social media is a relatively trivial problem to solve compared to the engineering feats he has discovered, he now finds himself in a very different industry, where much of his previous experience may not apply to absolute.

Just as worrying: he seems to be doing this mostly on his own, off the cuff, with Few people around you who are able or willing to tell you that you are wrong..

You can see an obvious example of this deficit in Twitter (of course) where Musk announced last week that the company had suffered a “massive drop in revenue” because advertisers had started to pull out. On the same note, he blamed the erosion of advertisers on pressure from “activist groups,” later launching a “thermonuclear name and shame” campaign against sellers who took their money. That is to say: he threatened his potential clients.

Which is exactly the kind of thing ad execs tell me they care about Musk and Twitter: that no matter what you say when you talk to them, they care about your behavior.

“Your personal Twitter account is introducing a level of reputational risk that, in my experience, most Fortune 500 companies can’t accept,” says Lou Paskalis, an advertising executive who met with Musk and 100 other Twitter officials. the industry via a Zoom call last week.

On that call, Paskalis said, Musk took a similar approach to the one he took today: earnestly engaging with questions from marketers, emphasizing his plan to clean up Twitter by introducing an $8 “light paywall” per month for Twitter users who don’t want their content buried and talked about creating a better advertising experience on the service.

Paskalis says Musk turned out well, if a bit “naive,” and seemed to allay some concerns from advertisers. “I think for most of us he moved the ball forward,” Paskalis told me. “He didn’t score a touchdown, but he gained ground.”

The next day, Musk fired half of Twitter’s workforceincluding some employees who worked on brand safety, a key concern of advertisers. Paskalis asked about the move on Twitterand Musk responded by blocking it.

That’s a move out of Musk’s playbook: He once refused to sell a Tesla to a customer who complained about Tesla in an open letter – and that has generally worked out well for him. On today’s call, he suggested that brands and their executives should follow his example and let loose more on Twitter: “Be more adventurous. That’s what I’ve done with Tesla and SpaceX and it’s worked pretty well.”

But ad executives I’ve spoken to disagree. While Musk says there has to be a distinction between Twitter user Elon Musk and Twitter owner Elon Musk, advertisers won’t notice any difference. Especially when he engages in things like highlighting a gross conspiracy theory about the attack on Paul Pelosi, through a tweet that he later deleted, or by threatening his advertisers. Who, again, are your customers.

“It’s one thing to look at customers and say the right things,” says a former member of Twitter’s sales team, who was laid off last week. “Another is to see their tweets.” Or as another ex-Twitter salesman told me: “Elon needs to realize that every tweet is a policy statement.”

Advertisers also say that, contrary to what Musk says, they aren’t too concerned about pressure from advocacy groups like Media Matters For America and the Anti-Defamation League, who have called on advertisers to hold off spending until Musk maintain existing infrastructure and content policies. Twitter had before he bought it.

“[Advertisers] I deal with activists all the time,” says an industry veteran who has bought Twitter ads in the past. “They certainly understand how to deal with pressure. Blame the activists? They are laughing.

Perhaps the biggest problem for Musk is the asymmetry between him and his advertisers: He needs them because he owes more than a billion dollars in interest payments a year. But they don’t need them.

Remember that the reason Musk was able to buy Twitter in the first place is that while some people, certainly Musk, think Twitter is very important, advertisers don’t. It’s a subscale digital ad platform, so it’s worth a fraction of Google and Meta. — two really important platforms that advertisers should use. Y Digital advertising is already under pressureso marketers would be happy to find a reason to cut spending on Twitter.

Even worse for Musk: Twitter advertisers, as opposed to the ones that rely on Google and Meta, tend to be branded advertisers, the ones you’d normally see on TV, as opposed to the ones that want you to click a link and get your credit card. . . That’s a group of ad buyers that is much more sensitive to controversy than someone selling, say, app downloads or supplements. “Marketers want predictability,” says a former Twitter ad man. “They don’t want to be fired by their boss.”

At the risk of hoarding, that’s not all. Since Twitter ad buyers don’t expect massive reach, Twitter has been training them to expect to reach a niche but influential audience: wealthier, more sophisticated, “more left and right coast,” as one buyer told me. of announcements this week. In other words, exactly the kind of audience an advertiser might think would be willing to leave Twitter if the Musk chaos continues.

Can Musk fix this? Maybe? It’s outlining a future where consumers spend a lot of money on Twitter, so it won’t be as reliant on advertising dollars. He also talks about making ads more engaging on Twitter and ultimately creating a “bottom-of-the-funnel” ad business, one that appeals to the kind of advertisers that Google and Meta use.

But all that is far away. Right now, he’s the richest man in the world and a relatively small group of people are worried about giving him their ad money. If he wants them on his side, he’ll have to do more than say the right things: he needs to change who he is. I will not accept that bet.

Correction, November 9, 5:40 pm ET: An earlier version of this story misidentified an advocacy group. It’s the Anti-Defamation League.