X has never been the most effective platform for marketers. It doesn’t offer the user base, targeting capabilities, or results that Google and Facebook do. And there are brand safety risks beyond hate speech. Musk has given marketers no reason to stay on the platform amid budget reductions across the industry, only insulting them and ignoring their calls to make X an acceptable-enough platform for them. Fortune 500 companies are not woke. It’s a strange lawsuit made completely bizarre by a hostage-style plea from X’s CEO hired to bring back brands that Musk had scared off. Faced with the reality that advertisers aren’t going to hand over their money, Musk is choosing to sue them.
Elon Musk is very mad that advertisers don’t want to spend their money on X.
X filed a lawsuit against a coalition of advertisers claiming that the coalition violated federal antitrust laws by dissuading leading companies from spending money on X. The all-powerful Global Alliance for Responsible Media “conspired … to collectively withhold billions of dollars in advertising revenue” from the Musk-owned social media company, the suit claims.
It’s a strange lawsuit made completely bizarre by a hostage-style video plea from Linda Yaccarino, the former NBCUniversal advertising chief who was hired as X’s CEO last year to bring back brands and ad buyers that Musk had scared off.
“No small group of people should be able to monopolize what gets monetized,” Yaccarino said in the two-minute video. She cited a recent report by the House Judiciary Committee which claimed the World Federation of Advertisers, GARM’s parent organization, tried to “control online speech.”
If you were unfamiliar with Elon Musk’s game, you might think there’s some grand conspiracy to keep one of the world’s richest people from getting more money. (OK, maybe that still sounds ridiculous.) But advertisers didn’t just fall out of a coconut tree.
First, we should note that Musk is a relative newcomer to the world of advertising. “I hate advertising,” Musk tweeted in 2019. Tesla, Musk’s electric car company, famously refused to advertise for most of its corporate history, though it started some modest campaigning in 2023.
Now, not only does Musk need advertisers to spend money on X, but he thinks that their own refusal to do so, or to do less advertising, illegally deprives him of their money. (Reader, there is nothing illegal about a company choosing where to spend its money.) Musk’s acquisition of Twitter, which made almost all of its money on ads, was bad business from the start. Musk campaigned to buy the company on a platform of restoring “free speech” for all users, which meant rolling back the content rules and enforcement procedures that the old guard had put in place to both keep advertisers happy and make sure Twitter wasn’t a cesspool of hate speech and misinformation.
Immediately after taking control of Twitter, Musk began removing content rules and allowed swarms of formerly banned individuals back on the site, including Nazis, white supremacists, and former President Donald Trump, who was once banned from Twitter for inciting the Jan. 6, 2021, insurrection at the U.S. Capitol using his @realDonaldTrump account. At the same time, Musk removed blue check marks that signaled users who might be a trustworthy source of information, and then sold them as part of a larger push for subscription revenue, a move that further corrupted the information ecosystem on the platform.
Contrary to what some people believe, Fortune 500 companies are not, uh, woke. None are paragons of morality and very few care about more than their own bottom lines. But, it is a simple truth of advertising that you, as an advertiser, should not want your ad—for shampoo, a scratch-off lottery ticket, a Toyota Camry—to appear next to racist rants and raves.
At a New York Times event in November, Musk responded to questions about his own antisemitic posts, apologized, and then immediately said he has no interest in what advertisers want. “Don’t advertise. If someone is going to try to blackmail me with advertising, blackmail me with money, go fuck yourself. Go fuck yourself. Is that clear? I hope it is.” He finished that rant off with “Hey, Bob,” referring to Bob Iger, the CEO of the Walt Disney Company, which had reduced its spending on X. X has never been the most effective platform for any marketer. It doesn’t offer the user base, targeting capabilities, or results that platforms like Google and Facebook do. There are so-called brand safety risks beyond hate speech: X is a platform for news and information, and sometimes advertisers don’t want their ads next to breaking news about war or politics. But Musk has given marketers no reason to stay on the platform amid broader budget reductions across the industry, only insulting them and ignoring their calls to make X an acceptable-enough platform for them to spend money on. After the GARM lawsuit, ad buyers told Adweek that they have to further rethink any activity on the platform now. “Why would I want to be in any way, shape, or form involved in a place that wants to sue individual advertisers and the bodies that authentically represent them for choosing to not advertise there?” one unnamed buyer said. (X named four advertisers—CVS, Mars, Unilever, and the Danish energy company Ørsted—as part of its GARM lawsuit.)
Musk quite simply feels like he is owed companies’ hard-earned advertising dollars. But he has done nothing to actually court marketers or listen to their real concerns. Musk’s campaign for “free speech” has turned out to be nothing more than rebuilding his favorite social media platform in his image—racist, conspiratorial, and unfunny. Faced with the reality that advertisers aren’t going to hand over their money, Musk is choosing to sue them. How could that plan possibly fail?
0 comments:
Post a Comment