Musk’s Twitter experiment continues to confound and alienate advertisers

Advertisers are now mandated to have a verified account to advertise on Twitter. afaqs! tries to ascertain how the move will impact the platform's ad business.

A few days after Elon Musk took over Twitter in October, he introduced a slew of changes to Twitter's content moderation policies.  Further, he has been experimenting with new revenue streams to supplement advertising revenue. It is worth noting that advertising in the US and other western markets lost faith in the leadership of Musk and paused ad spends on the platform late last year. 

The platform has been trying to push subscriptions for verification ticks. Twitter Blue subscription went live in February 2023. Subscribing to Twitter Blue will get users the coveted Blue Tick and remove ads from their newsfeeds. 

The company also launched Twitter Verified Organisations, a feature that lets businesses sign up and manage their verification and to add and verify any related accounts. "By subscribing, organisations can access our new tool to manage verification, meaning you have full control over your organization's presence on Twitter," the company said in a statement.

The Twitter Blue subscription costs $8 a month while Verified Organisations costs $1,000 per month. Advertisers spending over $1,000 a month will get their gold ticks without purchasing the subscription. 

The platform has now made it mandatory for businesses to subscribe to verified badges to continue advertising on the platform. In an official communication to brands, Twitter said, "Amongst other features, you’ll have a more visible organic presence and a broader range of creation tools. This change aligns with Twitter’s broader verification strategy: to elevate the quality of content on Twitter and enhance your experience as a user and advertiser."

Coughing up $8 for a Twitter blue subscription might sound like a no-brainer for an advertiser keen on continuing to advertise on the platform. However, it appears that the only promoted tweets on the platform are from brands with the golden badge.  Brands like Microsoft have not taken the new Twitter mandate well and have decided to pull back their ads from the platform.

.@Microsoft drops @Twitter from its advertising platform as they refuse to pay Twitter’s API fees; Musk reacts.#microsoft | #twitter | #socialmedia | #twitternews | #socialmedianews | #elonmusk | #elonmusktwitter | #digital https://t.co/y5SxNmNW0v

— afaqs! (@afaqs) April 20, 2023

Trying to ascertain why the platform decided to introduce this mandate, Mayur Milan, director- brand communications and digital, Ideosphere, feels "This can be an acknowledgement by the company that they need to monetise other areas to make money. Otherwise, it is a very perplexing move. Why would you make it difficult for people to advertise on your platform? Musk’s decisions are generally US-centric. Hence, maybe this decision is taken with a limited viewpoint but with a very far-reaching impact. There is no other plausible reason for this move to have come about as it is not the right one," he adds.

Sanjeev Jasani, COO, Cheil India, believes the new paid subscription-based system for blue ticks has caused confusion and controversy. "While the original blue tick was meant to confirm the authenticity of an account, the new blue ticks are virtually indistinguishable from the original ones, making it difficult to know who has paid for them. This move has led to notable users and brands leaving the platform due to a lack of transparency. Overall, this new system may negatively impact Twitter's role as a marketing tool for brands," he adds.

Since the announcement has created a sense of confusion, Sanjay Mehta, Joint CEO,  Mirum India, says that many brands that he works with won’t be signing up with the $1,000 Twitter subscription. “Earlier, when a brand had a blue tick, consumers knew for sure that this is indeed the brand’s verified handle. Now, consumers may not be sure. This new prerequisite is in its initial stages and is causing displeasure to brands. Forcing this kind of pay is something that brands are not going to be happy with."

Mehta further points out that the move is definitely putting off a lot of small brand advertisers because digital advertising enabled them to reach out to their audience with effective communication on digital platforms. The bang for buck is the key metric for advertisers when it comes to digital marketing platforms. “If Twitter puts such constraints, the money that was allocated for advertising on Twitter will go to other platforms in the near future,” he adds.

“Many of our clients are not opting to subscribe as of now. We are waiting and watching how discontinuing ads on Twitter impacts their relationship with their consumers. Budgets for Twitter ads are anyway not as high as $1,000 per month for several Indian brands. Ad spends rise during a campaign but that’s seasonal,” he says.

What sort of ROI will Twitter Blue for Business offer is still a cause of concern for brand advertisers

Abhishek Mudgal, Head, Social Media, Livspace, opines that the platform is not a preferred advertising platform for brands. Facebook, Instagram, YouTube, and Google Search are the primary avenues for digital advertising. On the new prerequisite for Twitter advertising, Mudgal says , "This move is the final blow for Twitter ads, especially since advertising on the platform used to be free until a few months ago. The cost of Rs 82,000 per month is a considerable amount of marketing spend, and may not yield any return on investment directly."

Mudgal is unclear about the benefits that Twitter Blue gives brands. Since billing still occurs based on the chosen objective and audience, he believes that unless new features are introduced, ROI will still be questionable.

Ruchira More, senior manager - analytics and paid media, OML Entertainment, feels that while Twitter Blue suggests better reach, the algorithm for improved reach via Blue is unclear, which brands are vary of as they would want to avoid their content showing up alongside unfavorable tweets or handles .

Since a majority of the features of Twitter Blue for Business (TBB) are yet to be announced, it is hard to predict the effect on ROI for advertisers. However, More believes that this could open up new marketing opportunities. "If Twitter Blue allows targeting Blue accounts, I see this opening up possibilities for certain products, especially SAAS / SWAS. Overall, even if brands buy Blue for authentication purposes, it will not cover the gap that losing smaller advertisers will create."