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  • Rachida Murray

ELON MUSK ACQUIRES TWITTER FOR "FREEDOM OF SPEECH"

Updated: Jul 5, 2022

Overview On April 25, Twitter accepted Elon Musk’s offer to acquire the company for $44B. There is much speculation on his plans post-closing, however Musk himself has tweeted that his goal for acquiring the company is to “make Twitter better than ever by enhancing the products with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.” Based on Musk’s tweets and statements, it is widely believed that his focus will be on new features, content moderation and a new business model that will allow greater freedom of expression for Twitter users. In recent years, pressure from advertisers to “clean up the platform” has kept Twitter motivated to lean into measures that create an increasingly safer platform for Twitter users and its advertisers.


Musk’s declarations of complete free speech could work against progress made on the brand safety and suitability fronts. To reduce reliance on advertisers, Musk has suggested moving to a subscription revenue model. It is important to note that the notion of subscriptions is not foreign to Twitter. In fact, Twitter has already launched a consumer direct subscription model named Twitter Blue, which for a $3 monthly fee available gives users access to exclusive features and added controls (i.e. bookmarking folders, edit & undo tweets, reader mode, customized icons, and more). Twitter Blue is a nascent solution launched in June ‘21 and only available in Australia, New Zealand, US, and Canada.

Content Moderation While newer social platforms have surpassed Twitter’s audience and revenues, Twitter still functions as one of the most critical “town hall” forums for breaking news across the world and the way the platform is run and governed has had major impact on societies, governments, businesses, and individuals. The advertising industry and its organizations have believed this responsibility requires some degree of moderation to prevent the spread of misinformation and disinformation from further plaguing user-generated content (UCG) environments and undermining trusted, legitimate news. Musk’s absolutists call for total freedom of speech goes against ad industry direction and can have a substantial impact not just across the advertising ecosystem, but across society at large. How Twitter adjusts to integrate direction from their new owner will have an impact on the world’s leading brands who hold themselves responsible for the safety and betterment of their customers and consumers.


Currently in Australia, Twitter has 4.3M monthly active users, the platform is used by younger audiences (50% under the age of 34) as a real time conversation stream about what is happening in the world, social conversation, sports highlights.


Twitter Response

  • We cannot speculate on changes Elon Musk may make post-closing. For now, there will be no changes as a result of this announcement.

  • Twitter has consistently tried to balance serving the open and public conversation and also creating a place where people can have healthy conversations and brands can connect in the safest way.

  • We remain committed to our product roadmap that helps businesses launch something, connect with what’s happening, and help people buy their products or services.

  • Partners can continue to expect our best-in-class customer service, client solutions and commitment to brand safety.

So, what now?

Regardless of whether Musk moves Twitter to a 100% subscription-based model to generate income for the company while avoiding advertiser pressures, the platform will have to abide by recent regulatory actions such as the Digital Services Act (DSA) in Europe which demands greater accountability from Social Platforms. We may see governments in Australia and NZ follow suit with similar legislation - but it is not certain.


Additionally, if Musk moves to a subscription-focused model, we do not believe the transition would be quick. At the current Twitter Blue $3 monthly pricing, it would require 67% of Twitter’s 217 million Q4 monthly active users (MAUs) to convert to a subscription to break even on advertising yearly revenues. Converting two-thirds of a global user base seems unlikely to happen. It’s more likely that Musk-Twitter would gradually shift to a more diversified mix of revenue than abandon $5B in annual ad revenues overnight.


In the coming quarters, we expect that Musk will become more thoroughly exposed to the economics of Twitter’s advertising business and understand the shift will need to be gradual and managed vs. sudden and definitive.


As of now, Twitter’s current leadership remains committed to brand safety for advertisers and has expressed that any changes to policies, guidelines, and products would consider the best interests of preserving advertiser adoption of the platform.


Finally, with Musk’s interests in democratized and decentralized approaches born out of blockchain technology (i.e., DAO: Decentralized Autonomous Organization) where community sets the standards for what goes and is/is not accepted, it remains to be seen whether Twitter users will side with Musk and align with his reluctance to delete things.


Publicis Media’s Digital Standards is committed to working with industry orgs like the Global Alliance for Responsible Media (GARM), the 4As and others to create healthier ecosystems for consumers and advertisers alike. We will continue to push for adoption of a safe-distancing approach to harmful content within social platforms and newsfeeds specifically, as well as more responsible marketing through PMX Pressure Points.

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