To put it mildly, events of the past two weeks have roiled confidence in Twitter.
The platform’s experimental Twitter Blue subscription program is rife with disinformation. Corporations, including drugmakers, have put millions of dollars in marketing on hold. And new billionaire owner Elon Musk is staring down a potential advertiser revolt enabled by his own unpredictable behavior.
“Particularly for an industry like healthcare, one which is steeped in conservatism, not knowing what’s coming next is a big question mark,” said David Chadwick, chief content officer at GCI Health.
Over the coming weeks, Musk has some crucial decisions to make that could quell the ambiguity – or just further frazzle companies and users whose nerves are already frayed by the fallout since his $44 billion Twitter takeover.
The maelstrom began with rogue messages issued by phony accounts sporting the blue check mark, which people were temporarily able to buy for $8 without verification. Eli Lilly was among the first to fall victim to the impersonators when a tweet was sent November 10 from a “verified” account bearing the name and logo of the drug giant, @EliLillyandCo.
The nine-word tweet read, “We are excited to announce insulin is free now.” No doubt tapping into the public ire over insulin costs, and high drug prices in general, it was shared some 1,500 times and garnered thousands of likes before being taken down. The damage quickly multiplied, as a host of other seemingly legitimate accounts, with handles like @LillyPadCo, rushed in.
Lilly officials frantically tried to get Twitter to yank the phony accounts sooner but, according to a Washington Post report, representatives from the social media firm couldn’t be reached for hours, likely due to massive layoffs imposed by Musk (the company is said to have fired its entire corporate communications apparatus). The next day, Lilly took action, suspending its paid advertising on Twitter and pausing the publishing plan for all its corporate accounts. (Lilly did not respond to a request for comment by MM+M.
Even before the Lilly incident, fellow insulin maker Novo Nordisk had put its Twitter ad buys on hold. Sanofi, the third company in the trio controlling the lion’s share of the insulin market, said through a spokesperson that it is monitoring the situation carefully.
Lilly, when it was unable to reach Twitter during those tense few hours, issued a statement on @LillyPad, its actual corporate account, that read, “We apologize to all those who have been served a misleading message from a fake Lilly account.”
The drugmaker was worried, understandably, that those fake messages would not only undermine its reputation but that they could harm people’s health. There may have been a financial toll, too, as Lilly’s share price sank 4% the day after the brouhaha, erasing billions in market cap.
Lilly may have been the only one of the major drugmakers to get caught in the brand-imposter crossfire before Twitter paused the Twitter Blue subscription program last Friday due to “impersonation issues.” But with Musk tweeting this week that it would be back by November 29, a key question remains: To what extent will brand-safety fears spur more pharma firms to flee his platform?
“The way that our clients use it may change, depending on how the platform evolves in the coming months, but I don’t foresee a dramatic exodus,” said Chadwick.
He explained that while there certainly has been hesitation among his pharma clients, what they fear more may be the disinformation vacuum that a Twitter pullout would create.
“What some of the brand spoofs have crystallized is that many of our clients do not want to cede ground to the potential disinformation,” Chadwick said. “There’s a relatively uniform position that there needs to be a presence on the platform so that there can be credible messaging coming from their organizations and not leave it up to the whims of the people to dominate the narrative.”
Nevertheless, Gilead said it has paused advertising on the site, as have Pfizer and GSK. In a statement, Novo said it is “monitoring the situation and will re-evaluate our strategy on an ongoing basis.” Many others could be quietly following that approach.
Other mainstream advertisers have pulled back. Omnicom Media Group has advised its clients, which include PepsiCo, Mercedes-Benz and McDonald’s, to halt investments on Twitter in light of recent layoffs and brand safety concerns. IPG Mediabrands had earlier counseled a similar retreat.
Some analysts saw it coming. Insider Intelligence’s eMarketer cut its 2024 ad forecast for Twitter by 39.1%. By the firm’s latest estimate, Twitter’s global ad revenues will grow just 4.9% to $4.67 billion this year and will stay essentially flat for the next two years. Its previous forecast predicted Q1 revenues growing 25.1% to $5.58 billion, then jumping another 21.6% in 2023 and 16.0% in 2024.
The downward adjustment was “partly due to the overall slowdown in the ad market but also due to the changes Elon Musk is making to the platform,” eMarketer said this month.
“Before the takeover, Twitter’s ad business was already taking a beating from the economic uncertainty,” said Jasmine Enberg, principal analyst at Insider Intelligence, in a statement. “Tack on Musk’s erratic behavior, his lack of a clear plan for Twitter’s ad business, as well as fears about misinformation and a user exodus, and many advertisers are suspending their advertising on a platform that already isn’t essential to many companies’ media plans.”
Heading into the weekend, that plan began to take shape. After pausing Twitter Blue, the company began attaching “official” labels to major corporate accounts, including Lilly’s. On Friday evening, Musk tweeted that Twitter would begin adding a “parody” tag to fake blue-check accounts.
But the situation remains very much in flux. Last week, for instance, Twitter debuted a second, gray checkmark to identify official accounts, but quickly rolled it back.
“Some of the trepidation that we’ve heard from clients is just that: ‘With each passing day, we don’t know what to expect,’” Chadwick noted.
What can Musk do to restore a sense of calm?
“If there is some sort of plan and way to telegraph what the intent will be, partners and advertisers can determine how they are going to evolve with the changing landscape of Twitter,” Chadwick said. Citing the way Musk’s content moderation council idea was sign-posted as an example, he said, “That would make the medicine go down quite a bit easier.”
Second, brand spoofs are more insidious than the occasional meme or viral commentary interfering with a corporate message. The issue must be resolved in order for pharma companies to feel like they don’t have to worry about the parody accounts.
Chadwick speculated that Twitter verification will take a “slightly different form on its relaunch,” possibly tracking in line with the way the new “official” tag is being positioned.
Third, Musk should pursue some of the ambitious goals that preceded his takeover, like policing and removal of spambots. That alone has the potential to improve the site enormously, Chadwick noted.
Musk said recently that he wants to make Twitter a top-tier platform for advertisers, but the CEO is falling short with that group.
“Musk’s attempts to keep advertisers happy have been futile,” Enberg said. “His management style won’t help motivate employees or comfort advertisers. Many of the employees who could have soothed advertisers’ concerns are now gone.”
Indeed, there’s much that Musk wants to do in terms of remaking Twitter in his own image. But that’s going to be very hard if his changes alienate advertisers in the long-term, given how reliant Twitter’s business model is on advertising.
“The amount that is being returned for potential subscription models will need to be much more than $8 a month in order to recoup the amount that would be lost if the top tranche of advertisers finds Twitter no longer to be a vessel that they can safely engage in,” said Chadwick.
At the end of the day, it seems, Musk has to own up to that fact – or the situation may get worse before it gets better.