The real Musk effect

As global brands, including General Motors and Pfizer, suspend advertising on Twitter after its acquisition by Elon Musk, some in South Africa’s digital community are sounding a note of caution about the platform. Others believe concerns are merely a short-term blip.

There are fears that, unmoderated, the site could become a repository for hate speech.

Jacques Naudé, head of marketing technology & marketing data architecture at Accenture Song, tells the FM that brands and agencies are likely to move their digital marketing spending to other platforms until they see how a new Twitter approach to censorship and the verification of information plays out.

“We saw this happen on Facebook after the Cambridge Analytica scandal. We need to realise that digital consumers are savvier about the information they consume, but also [about] the platforms they trust.”

Advertising revenue accounted for 91.4% of the $1.2bn generated by Twitter in the second quarter, ended June 30. In the early part of 2022, Twitter’s advertising resources reported having 2.85-million Twitter users in South Africa, meaning its advertising reach was equal to 4.7% of the country’s population.

Tom Manners, co-CEO of the Clockwork agency, believes major advertisers will take a dim view of Twitter under Musk. “Platforms that can offer a diminished risk of being associated with hate speech, violence and extremist views, while also maintaining a strong verified base of users, will attract revenue. Conversely, those who represent a reputational threat to brand integrity simply will not.”

Matthew Arnold, chief connections officer at VMLY&R, says while Twitter has a huge audience globally, its profitability has always been a challenge. He expects rapid monetisation of the platform, increased use of artificial intelligence for advertising targeting, a sharp increase in short-form video to compete with TikTok, and expanding supporting services such as payments, delivery and travel.

Kerushan Govender, CEO of the strategic consultancy Blacfox, has a more pragmatic outlook: “It is only a matter of time before the dust settles and Musk’s vision of an open digital town square will become more apparent. It is actually a great opportunity for brands to jump on board during this transition, demonstrating their support for the open-dialogue promise.”

Veteran strategist Gordon Muller says: “Advertisers do not have to trust his judgment, just what his judgment delivers. When it comes to media, there are only three outcomes. It worked. It did not work. And, most common, I do not know.

“If it works, advertisers will support it. If it does not work, advertisers who have already committed will want compensation. And if we do not know, we will invest against minimum guarantees.”

Don Packett, chief growth officer at Youknow Digital, says advertisers play where people play. “Even with the slight decrease of South African users on Twitter over the past year, it is still a rich playground of eyeballs and prospects. [Advertisers] want relevant content in front of the right people, no matter the platform.

“Yes, some more prominent brands are publicly sharing how they are holding back until further notice, but it is more a PR exercise. If the big guns leave Twitter as an advertising space and allocate more money to ever-growing TikTok, the second-tier organisations with smaller budgets will fill the newfound void with their own budgets very quickly.”

Armandt J Viljoen, CEO and head developer at Dimension WebWorx, says  Musk is appealing to brands to trust his judgment. “Only time will tell if his gamble pays off. I believe he will continue to make Twitter an even better platform for communication. I think he will aspire to keep the platform from being considered negative and will see the impact it can have in a short and to-the-point tweet while keeping the platform as neutral as possible.”

Maxine Selmer-Olsen, strategic planner at the Grey Group, says brands will eventually have to make a choice between the benefits of reach and engagement for consumers on the one hand and exposure on a platform with little or no moderation on the other.

According to industry website The Drum, General Motors and Ford have both curbed spending until they have reviewed what a Twitter run by Musk looks like. It says other advertisers will be exercising extra caution in the coming weeks. A key issue is the uncertainty about how safe the platform will be as content moderation rules quickly change.

The Global Alliance for Responsible Media says platforms should be safe for all and suitable for advertisers, and that this is non-negotiable.