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It’s only been a few days since Elon Musk declared that “the bird is freed” upon closing on his acquisition of Twitter—and already he has started to change the company from the inside out. From pending layoffs of a quarter of the staff to the leak that the company is planning to charge $19.99 for a new Twitter Blue subscription, big changes are underway to a platform that has been fairly popular with advertisers since the bird turned to ads in 2010. Just this morning, Sarah Personette, Twitter’s chief brand officer and liaison to the advertising community, announced she has left.
Long before the deal closed, advertisers were unsure how this new ownership would change the platform and if it would be a viable option for them moving forward.
To examine what might happen, let’s take a look at how social media budgets are allocated today: Based on Q3 2022 data, Twitter is No. 3 among social media platforms, capturing 10.4% of social media budgets behind Meta (No. 1 at 55%) and Snap (No. 2 at 10.7%). TikTok is closing in on Twitter’s spot with accelerated growth in 2022, now No. 4 at 9.9% share. This is a dramatic change from pre-pandemic Q3 2019, where Facebook accounted for almost three-quarters of the share of social media budgets, followed by Twitter at second with 12.2% share.
One of the most notable moments from the negotiation phase was when Musk tried to pull out of the deal citing fraudulent accounts boosting numbers. Did this public conversation around bots scare advertisers away before the deal closed? The answer is no. In fact, August spending on Twitter was higher than July, and September spending was higher than August. But fraud isn’t the only concern that advertisers might have.
Brand safety has been widely discussed as a huge potential issue with Musk’s vision of digital town square embracing free speech. Already there have been reports of a 500% surge in the use of a racial slur, causing some big names to leave the platform. (Coincidentally, this happens to be Brand Safety Week.)
What happens next depends on how Twitter’s new content moderation council addresses issues like account reinstatement: For instance, several advertisers reportedly plan to boycott Twitter if Elon Musk allows former president Donald Trump back on the platform.
In the event that we start to see ad dollars pulled back from Twitter, there is an opportunity for other social media platforms to take them.
Meta
Yes, the costs on Meta are higher right now but it could still be a worthwhile shift for advertisers who are concerned about Twitter. Meta’s wide reach and success around low-funnel objectives often makes it worth paying a bit more to reach target audiences. This is especially true considering their ads sometimes still outperform other platforms’ performance.
Additionally for those concerned about brand safety, Meta recently announced updates that will allow advertisers to control content adjacency in the Instagram and Facebook feeds, according to their brand safety risk tolerance.
TikTok
Launched in 2016, TikTok is now the third-largest social network in the world. With U.S. adults spending an average of 46 minutes per day on the platform, TikTok appears to have ascended to YouTube levels of engagement and has cracked the coveted Gen Z audience.
It’s clearly a channel ripe with opportunity for marketers, so it’s not unlikely that we’ll see ad dollars shift here, regardless of what happens with Twitter—particularly for retailers, as TikTok users are 1.7 times more likely to buy products they discover in their app compared to other platforms. This social platform is also a commerce platform.
The ultimate question is: Will Twitter being private enhance the service to provide greater value to advertisers, or will advertising on the platform lose its ROI?
While it’s too soon to say what will happen, we can say for certain that if a brand is concerned about fraudulent traffic, brand safety or any other issues on Twitter post-acquisition, they don’t have to transfer dollars away from the medium: Social offers a lot of opportunities for advertisers to reach their audiences, particularly for certain sectors, so these brands can instead shift that money into other platforms like Facebook, Instagram and TikTok to reach their goals.
While we haven’t seen these dollars shift away from Twitter yet, we’ll be keeping a close eye to witness this next evolution of social media advertising.
