NEW YORK (Reuters Breakingviews) – Twitter’s new owner Elon Musk is making it too easy to hit the pause on ad spending. General Motors, Mondelez International, Pfizer and Interpublic Group are just some of the companies and agencies suspending their ad dollars on the social media network because of brand safety issues. Eli Lilly had to apologize on Thursday for a fake account – verified with a blue check no less – that tweeted out a message announcing free insulin. This latest chapter will be hard for Twitter to overcome.
Social media companies are no stranger to ad boycotts. Meta Platform’s Facebook two years ago was targeted by the likes of Verizon Communications and Unilever because they were concerned about toxic content. Yet, Mark Zuckerberg’s outfit managed to increase its advertising revenue 20% in 2020 compared to 2019. That’s because Facebook and Instagram rely more on small business advertising, which is a diverse scattered group.
Twitter reaps almost all its revenue from big brands, and those big advertisers are already looking for an excuse to put the brakes on spending. Even high flying TikTok slashed its ad target by $2 billion this year, according to Bloomberg. Musk is just giving them an out. (By Jennifer Saba)
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(Editing by Lauren Silva Laughlin and Amanda Gomez)
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