With election day looming (December 8th, 2022), we are all being hammered by the last tranche of political ads. These are the spiciest ads to run, as candidates will not be able to respond to the messaging. They can publish bald-faced lies for the next 24 hours, and nobody will be the wiser.
We’ve also seen Elon Musk buy Twitter for 44 Billion dollars. Most of those dollars are coming from Musk’s Tesla buy-down, but other investors of note, Larry Ellison/Oracle ($1B) and Saudi Prince Alwaleed bin Talal ($1.9B), swing in to help the tech bro with his pet project.
Twitter Advertisers Flee
For good or for bad, those wary of Elon Musk’s motives have pulled their advertising spend on the news, making sure that their brands can retain their sheen amongst all the hype. In all honesty, these brands were probably begging to reduce their Twitter ad spending as social media eyeballs continued to drift heavily to TikTok. The news of Elon buying Twitter was just the straw that broke the camel’s back.
Elon’s Call for Free Speech
Over the past year, Elon decried Twitter as the company tamped down on accounts espousing white supremacist, racist, and politically charged posts. Since Twitter was never a fully transparent company, and because accounts were being taken down, some with no “reason stated.” Musk called out the publicly traded entity for selectively canceling conservative posters. As Twitter never showed how they took down accounts (both R and D) with equivalent zeal, it left a bad taste in every mouth that the social media giant was helping one cause while smothering others.
Politicians and Platforms
While all social media companies are desirous of the title of “largest and most engaging platform,” politicians are equally desirous of being the “most prominent voice on the largest and most engaging platform.”
While social media companies WANT to be known as the biggest and the best, that title also brings billions in advertising dollars. The capitalistic drive of these companies far outweighs their interest in being transparent, socially responsible, or even politically leaning. It’s about the money.
Politicians spend their time wanting more views. And to do that, they must be controversial. And then, their followers/supporters take to the Internet and crank up a controversial statement into an even more polemic stream of consciousness. Rarely even bothering to quote the statement directly.
Publicly Traded Companies
The goal of any publicly traded company is to make money for its shareholders. Efficient capitalism demands the protection and active defense of existing revenue streams and new (sales). It also doesn’t take political positions, as in doing so, it could effectively cut off 50% or more of those revenues. I would argue that it would be difficult to find a Board of Directors that is OK with halving their profitability to take a stand on abortion rights or cratering their stock price out of a necessity to be “woke.”
Private Companies
A privately held company has no such misgivings. Their internal capitalization being held by one or a few individuals means that they can say what they want and hold whatever political affiliation they desire in exchange for whatever financial consequence comes their way. As a private company, Twitter no longer has to share information about the demographics of whom they hire, they don’t have to share how profits are divvied up, and they don’t have to identify how or why a Tweet or hashtag becomes “trending.” Simply put, they can turn knobs and pull levers on content promotion according to Elon’s will.
For Advertisers
Advertisers understand that the advertising marketplace can be challenging. YouTube, Google, and Microsoft have had their thumbs on the scales of advertising marketplaces for years. They have been able to present what is considered an “auction” (a free marketplace where the advertiser with the most money gets the most exposure) into one where ads are graded for quality based on what we can only assume is an algorithm.
Even if Twitter advertisers and their Brands absolve themselves of any political or social bias for or against Elon Musk, they also must know that Elon has zero responsibility to be fair to any advertiser in that marketplace. Twitter can effectively:
- Not take their money. Since they aren’t driven by profit, they can quit taking money from advertisers that do not espouse the thoughts and ideas of Musk.
- Take their money and burn it. Effectively putting certain advertisers in the hot seat where their ads are enormously more expensive and displayed half as much.
- Selectively weigh adverts. Using a scoring mechanism and an algorithm determined by Musk, Twitter can set frequency, ad display location, and engagement metrics.
Free Speech or Consequences
Elon Musk is already being challenged as to the voracity of his desire for free speech. Almost immediately, Elon’s account was out on Twitter, inviting back controversial accounts that were banned while also sharing and then deleting some misinformation. If it genuinely was a platform that embraces free speech, all forms of speech should be welcomed. Zero moderation. A literal wild west of ideas, thoughts, and machinations.
The consequences for Twitter are now consequences for its CEO and CFO, Elon Musk. Does he have the intent to go on and personally moderate the 5oo million tweets shared daily on the social media platform? Or do you only get pulled over by Elon’s content police if you say something he disagrees with?
We know from the investigations that have been going on over the last three years that Twitter can be bent over quite literally by bot networks. So, if it is truly a “wild west” of information sharing out there, any extensive Russian bot network can ignite any issue they want or pass around misinformation at the press of a button.
Advice for Advertisers
Right now, I wouldn’t be too concerned with the current state of Twitter. Elon is an iterative genius, and he will either figure out how to purge the network of bots and content manage billions of tweets, AND bring back all the big advertisers, or he won’t.
So for all who think Elon Musk doesn’t understand how consequences work, he has chosen Twitter as the hill he wants to defend. Best of luck.
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