With the purchase price of $44 billion, Elon Musk is dependent on Twitter to make more money, but major advertisers are cautious. Meanwhile, thousands of workers could lose their jobs on Friday.
Volkswagen has joined major companies seeking to freeze ads on Twitter following its acquisition by tech billionaire Elon Musk. As the reason, the Wolfsburg cited the announcement of the US short message service to revise the guidelines for posting such content.
The VW group has now “recommended its brands to pause their paid activities on the platform until further notice,” it said. This is not a definitive advertising stop: “We are closely monitoring the situation and deciding on the next steps depending on how things develop.”
Months back and forth about Musk’s plans to enter Twitter and his ideas about direction and how he interacts with employees had caused a stir recently. The Tesla and SpaceX boss completed the purchase of the social network for about $44 billion last week.
Twitter as «the most correct source for information»
Musk promised to take action against fake accounts and spam and make Twitter “the most accurate source of information in the world”. On the other hand, he himself recently spread a link to a conspiracy theory about the attack on Paul Pelosi, the husband of US House Speaker Nancy Pelosi. Musk is also known for his unpredictable communication.
There is also resistance from users to his plans to offer the coveted blue checkmark for verified accounts as part of a paid subscription. Musk wrote, “To all those who complain, please keep complaining, but it costs eight dollars.” In addition, subscribers would only see half of the usual ads. On Twitter, ads play as “paid tweets” in users’ timeline.
A permanent withdrawal from major advertisers would be a problem for Twitter and Musk. The service recently wrote red numbers. Musk also took out loans of about $13 billion for the acquisition deal — and media reports say it takes more money to maintain them than the Twitter business generates in free money. Shrinking revenues, in particular, would be inconvenient.
Last week, Volkswagen’s American rival General Motors had already announced that it would in any case stop its advertising activities on the platform. The pharmaceutical company Pfizer and the food giants Mondelez and General Mills are said to have taken similar steps.
90% of revenue comes from advertising
Possibly even more threatening to Twitter’s advertising business, which accounts for about 90 percent of sales: the large international ad groups are also keeping their distance. Industry giant IPG, which manages billions in advertising budgets for companies such as Coca-Cola, American Express, Levi Strauss and Spotify, is said to have advised customers to stop advertising on Twitter just days after its acquisition of Musk.
“It’s not yet clear where Elon Musk stands,” the founder of the world’s largest ad holding company WPP, Martin Sorrell, said this week ahead of future Twitter guidelines. So companies waited. “Customers don’t want conflict, they don’t want controversy.”
VW has been paying more attention to the environment of its online advertisements for some time now. Sharp criticism came when a flaw in an automatic display filtering program led to an ad being placed on the right-wing US news portal “Breitbart”. The carmaker used the processing of a video spot on Instagram that was deemed racist as an opportunity to review its internal award procedures. (sda/awp/dpa)
Soource :Watson
I’m Ella Sammie, author specializing in the Technology sector. I have been writing for 24 Instatnt News since 2020, and am passionate about staying up to date with the latest developments in this ever-changing industry.
