(Preview) Elon at the DealBook Summit, The Strategic and Technical Failures at X, What Musk Might Be Getting Right
Nov 30, 2023
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Elon Musk and Andrew Ross Sorkin discuss the limitations of Twitter for advertising and its impact on revenue. They explore the influence of society's valuation of free speech on company decisions and brand image. They also discuss brand safety and hate speech on Twitter, as well as Elon Musk's lawsuit against Media Matters and its implications on free speech.
Twitter's format, lack of targeting capabilities, and focus on brand advertising have led to struggles in attracting advertisers and maintaining leverage over them.
The tension between free speech and brand safety poses challenges for platforms like Twitter, with brands prioritizing customer perception and association with controversial content over the principle of free speech.
Deep dives
Twitter as a Terrible Platform for Advertising
The podcast highlights that Twitter has always been a poor advertising platform, primarily due to its format and targeting limitations. The nature of Twitter as a platform, where users are often engaged in other activities or focused on textual content, makes them less receptive to advertisements. Unlike platforms like Instagram, where users are more likely to come across ads while casually browsing through pictures, Twitter users are more likely to find ads intrusive. Additionally, Twitter's advertising model has predominantly focused on brand advertising rather than direct response advertising, where the return on investment is easily measurable. This has led to struggles for Twitter in attracting advertisers, especially during periods of advertising slowdown or when faced with brand-associated controversies.
Lack of Leverage and Value for Advertisers on Twitter
The podcast explores the lack of leverage that Twitter has over its advertisers. Unlike platforms like Facebook, where advertisers rely on the platform to efficiently acquire customers and generate revenue, Twitter's advertising model and platform limitations have made it less valuable to advertisers. This lack of leverage is exemplified by the fact that Twitter had difficulty retaining advertisers during an advertising boycott, unlike Facebook. Moreover, Twitter's poor targeting capabilities have led to instances where ads are displayed next to objectionable content. This, coupled with Twitter's inability to effectively address these problems, has resulted in brands distancing themselves from the platform and making business decisions based on the perception of their association with controversial content.
The Conflict Between Free Speech and Brand Safety
The podcast delves into the tension between the value placed on free speech and the concerns surrounding brand safety. It highlights the challenges faced by platforms like Twitter in moderating content and ensuring that ads are not displayed alongside hate speech or objectionable material. The inherent characteristics of open platforms make it difficult to prevent instances where brand ads end up next to unsavory content, even if the platform attempts to mitigate this issue. The podcast suggests that corporations making decisions about advertising prioritize their brand image and customer perception over the principle of free speech. The prevailing sentiment among particular demographics, who do not prioritize free speech and may even have negative views towards certain personalities like Elon Musk, influences the decisions made by brands regarding their association with platforms like Twitter.
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