Last month, advertising executives at one of the industry’s biggest trade shows gathered to watch Linda Yaccarino – then the chair of global advertising at America’s biggest TV network, NBC Universal – interview Elon Musk. Yaccarino is known to some of her colleagues as the “Velvet Hammer” for her friendly but indomitable negotiating style, and on stage at the conference in Florida she wore a canary-yellow suit and chunky gold jewellery. Sitting across from her, Musk looked pale and sweaty, but despite Yaccarino’s reputation she could not have done more to make him comfortable, encouraging rounds of applause from the audience and asking softball questions about why “the people in this room” – from the advertising industry, which has paid practically all of Twitter’s income so far, but has sharply cut its spending since Musk took over the platform – should feel confident about his leadership.
On 12 May, it became apparent why Yaccarino seemed to give Musk such an easy ride: because it was she who was being interviewed, for her new job as Twitter’s CEO. Musk announced the appointment himself, through Twitter; Yaccarino’s employer did not appear to have been informed. Musk’s own role is changing from CEO (or “Chief Twit”, as he describes himself on the platform) to chief technical officer.
Musk has always been of the opinion that a product should sell itself, without the need for paid promotion – “I hate advertising,” he tweeted in 2019 – and his electric car company, Tesla, has never paid for a conventional ad. In his pitch to the investors who funded his $44bn buyout of Twitter, however, he committed to growing the platform’s advertising revenue from $5bn in 2021 to $12bn in 2028. Days before Yaccarino joined Musk on stage in Florida, the research company Insider Intelligence forecast that Twitter’s income from ads would fall to less than $3bn this year, a drop of 37 per cent since Musk became CEO.
At the same time, Twitter needs more money than ever before, because it was bought using almost $13bn in bank debt which incurs around $1.5bn a year in interest payments. Appointing one of the advertising industry’s most senior executives to run Twitter (Yaccarino was also chair of its Ad Council from 2021 to 2022) is a tacit admission that the company is in bad shape. But insiders say that even if Yaccarino is given a free hand, it may be too late for her to save the business.
A senior brand strategist at a global advertising agency told me that to advertisers, Twitter has always been a small platform with an outsized influence. Messages are more likely to “self-propagate” across Twitter, amplified by the network effects of its often animated conversations. This high “exposure ratio” gives advertising greater “organic reach”, but it also means that brands have very little control over how their messages might grow.
Facebook, in contrast, is a very different product: its audiences are closely identified and targeted using keywords. Twitter was always the less predictable platform, then, but in the aftermath of the Musk takeover a significant “brand risk” emerged. Bruce Daisley spent eight years at Twitter, as the company’s UK managing director and then as vice-president. He agrees that Twitter “was always smaller than its competitors, so it always in terms of advertising punched above its weight – it took more money than it probably deserved”. But the market has changed, Daisley explains, with other companies taking ad revenue. Amazon has quietly grown into a $38bn ad giant and Netflix has begun offering ad-supported subscriptions. “There’s more choice than ever before” for advertisers – and less reason than ever to gamble with a company’s reputation.
The other danger to Twitter, acknowledged by Musk in his interview with Yaccarino, is that most people don’t actually like being on Twitter; he said the company is working to “maximise the unregretted user time” on the platform. The ad execs in the room would have recognised this as similar to the widely used “net promoter score”, or NPS – a rating given to brands that quantifies how likely a consumer is to recommend their product to someone else. Tesla is a company built on NPS: with no advertising, it has shaped a brand through how much people enjoy driving and owning Teslas (“Our owners become our ambassadors,” Musk told the trade magazine Ad Age in 2009). Out of a maximum of 100, Apple has an NPS of 47 and Sony has an NPS of 61. Twitter’s NPS is three.
“No one would tell a friend glowingly how much they enjoy Twitter,” says Daisley. “People perceive that Twitter fulfils a need, but don’t feel any brand fondness to Twitter. Most people hate their Twitter usage, even though they return to using it repeatedly.” When large numbers of people are using a product they don’t really like, he says, “that is classically where you’d find a market fit for disruption”.
What mature social media platforms such as Twitter and Facebook are discovering – as local newspapers did a decade earlier – is that the network effects that allowed them to grow so quickly apply also to their own users. As in a bank run, the crowd will shift gradually, and then all at once: Twitter will look relatively secure until a sufficient volume of people find they can switch easily to a palatable alternative. The money has to a great extent already moved: the strategist told me there has been a “big, fundamental shift towards LinkedIn”, which clients see as a “much less risky platform” for advertising, while TikTok is a bigger and faster-growing option for influencer marketing. For the publishers and content creators who once relied on Twitter, too, there is an increasing move towards platforms such as Substack. Even Twitter founder Jack Dorsey – who still has $1bn invested in the company – has launched an alternative, called BlueSky.
[See also: I closed my Twitter account. So now what?]
It is not only brands but regular Twitter users who will continue to be put off by the platform’s increasingly evident lurch towards paranoid libertarianism. The former Fox News host Tucker Carlson, who was sacked by Rupert Murdoch after his espousal of vote-rigging conspiracy theories cost the network $787.5m in a defamation settlement with the voting machine manufacturer Dominion, has announced he will relaunch his show on Twitter.
Meanwhile, in the past week alone, Musk himself has had to defend both Twitter’s censorship of the Turkish opposition and his own claim (rebutted by police) that the neo-Nazi who murdered eight people in a Dallas shopping centre was not a white supremacist.
Will Yaccarino be able to filter some of the effluent spewing from Musk’s own account? Daisley says that in his extensive conversations with former Twitter employees, he’s noticed two points that are common to their experiences. The first is that Musk “never fired anyone personally – he would get someone else to do it”; the second is that “he really didn’t truck dissent… he did not like people disagreeing with him”.
However smart and well-connected Yaccarino is, then, it may be that the biggest obstacle in her efforts to turn Twitter around will be Musk’s fragile ego: “Her job,” says Daisley, “is going to be to agree with him.”
[See also: Twitter is dead]
This article appears in the 17 May 2023 issue of the New Statesman, The Left Power List