Stay Optimistic, Advertisers Are Waiting For Elon Musk's New Breakthrough On Twitter

Elon Musk often thinks outside the box. (photo: screenshot)

JAKARTA - Elon Musk's $44 billion deal to make Twitter Inc a private company could mark the end of the advertising business on social media platforms. This made many in the advertising industry start to worry.

But in the weeks since April 25 when the Tesla Inc CEO announced the deal, Madison Avenue's stance on Musk's upcoming version of Twitter has evolved. Optimism holds and plays in two ways.

Some ad buyers hoped to get better deals from the company going through a massive transition. Others are betting that Musk, who has been heralding new product ideas every day on Twitter, could deliver what Twitter has failed to do so far like launch new products faster. This comes from advertising executives who spoke to Reuters.

His belief is that Musk's push for faster product development will attract more new users which will form the basis for a better marketing environment.

The view is a shift away from the ad industry's gloomy outlook after Musk appeared to throw "cold water" on Twitter's $5 billion ad business, tweeting that the company should become a forum for free speech and questioning the platform's dependability on advertising for their main income.

According to the slides Musk presented to investors, he expects Twitter to have 931 million users by 2028 from 229 million in the last quarter of the year. Meanwhile, its advertising revenue more than doubled to 12 billion US dollars (IDR 174.5 trillion), representing about 45% of its total revenue at the same time.

Despite Musk's repeated remarks about minimizing content censorship on the platform, he also appeared in a video last Monday with the European Union's head of industry, Thierry Breton, to discuss the upcoming Digital Services Act, which will require the platform's participation to curb illegal content. Musk said he "had the same thoughts" and agreed with "everything [Breton] said."

In the short term, several ad agencies have advised clients to look back at doing business with Twitter.

An ad agency executive who declined to be named said they expect negotiations to begin in the coming months to reach lower ad prices on behalf of some clients, as Twitter may be more flexible during the period of uncertainty before Musk closes its takeover deal.

Code3, an agency that has worked with brands such as Chipotle, Dior, and Gap, will advise some clients to consider increasing their investment in Twitter in the near future to capitalize on the buzz Musk has helped foster on the platform, according to Lizzy Glazer. vice president of connection planning at Code3.

On Tuesday, Musk said during a Financial Times conference that he would reinstate former US President Donald Trump's Twitter account.

Advertising and marketing executives who spoke to Reuters said they were closely watching the changes Twitter could make to the platform. Most advertisers haven't made significant changes to their spending, but have eased concerns about leaving Twitter.

Some experts predict Twitter could actually be a more attractive environment for advertising brands under Musk.

“Musk can help jolt Twitter to be more competitive with new features and lead to greater user growth,” said Erica Patrick, director of paid social media at advertising agency Mediahub Worldwide. The agency also oversees advertising for Netflix Inc and Fox Sports.

"Twitter has always been fourth as a social platform," he said. "(Musk) is indeed innovating and he can think outside the box. If it's a private company, there are a lot of things they can do faster."

"Even the hope that Musk's ownership could lead to looser rules on content would be a boon for some marketers aiming to play viral events," said Ishan Goel, founder of Goel Strategies, a marketing agency that has worked with brands like Hulu and Colgate.

"As a marketer, you get the most viral moments when there's a breakdown," he says.