X: Better to save

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Back in June, Linda Yaccarino, a former chairman of global advertising and partnerships at NBCUniversal, took over as the CEO of Twitter (now X) from the platform’s owner, Elon Musk. Under Musk’s leadership, X lurched from one crisis to another, and Yaccarino was very much hired to be a steadying hand and a foil to Musk’s more idiosyncratic impulses. So what are the issues that X is facing, what is Yaccarino doing to address them and can advertisers trust the platform again?

Ongoing issues at the platform formerly known as Twitter

The key issue that X is still contending with is the fact that advertisers are fleeing in their droves. Elon Musk’s emphasis on free speech has opened the floodgates to misinformation, disinformation and hate speech; teamed with a watered-down approach to content moderation, this has created a platform that poses risks to brand safety. Data released in February revealed that more than half of X (then Twitter)’s top 1000 advertisers were no longer spending on the platform, with inevitable ramifications for income. In July, it was reported that Twitter/X had lost almost half its advertising revenue since Musk purchased it.

There has been a growing lack of trust in the platform which will exacerbate advertisers’ concerns. This won’t have been helped by analysis that has shown that many of the top publishers using Twitter – including the New York Times, Reuters, The Guardian and the BBC have seen their traffic referrals from X fall dramatically over recent months, due at least in part to X slowing page load speeds of links to these news organizations. It’s these organizations that can be relied upon to provide trustworthy information; if they are scared away by Musk’s aggression, X will become more and more like the wild west of social media.

Alternative income streams

Musk’s response to the loss of ad revenue has been to focus on alternative income streams, chiefly monetizing users. This has included incentivizing users to pay monthly fees for algorithmically boosted posts and exclusive use of certain features. In early August, X announced that it would expand access to its ad-revenue-sharing program for creators, thereby attracting content creators with ad revenue payouts to users who are subscribed to X Blue. However, with the threat of Meta’s Threads looming, the issue of ad revenue needs to be addressed – and that’s where Yaccarino comes in.

Revamping X’s struggling ad business

Since Yaccarino replaced Musk as Twitter/X’s CEO in June, her focus has been on revitalizing the platform’s ad revenue – and that means rebuilding advertisers’ trust. This can only come from steadying the ship and Yaccarino acting as a counterfoil to Musk’s mercurial leadership style. With this in mind, Yaccarino has been reaching out to brands such as Visa, Coca-Cola and State Farm to offer them reassurance that X is a safe place for their brand investments.

Yaccarino has also revived X’s ‘client council’, which Musk previously abandoned. The council is a select group of leaders from the advertising industry who are invited to give their feedback and input into decisions that affect X’s future. This will give them influence and, it is hoped, will make them more likely to buy into X’s vision – and their advertising product.

Yaccarino has also sought to allay advertisers' brand safety anxieties by partnering with Integral Ad Science (IAS), who will provide advertisers with pre-bid brand safety and suitability insights.

Twitter becomes X

While the moves that Yaccarino has made to entice large advertisers back to the X fold are positive and will undoubtedly help address the negative perception that X currently has amongst some advertisers, she will unfortunately come up against a stumbling block, in the form of her company’s rebrand. Yaccarino was fully supportive of Musk’s controversial decision to rebrand Twitter to ‘X’, which she claimed was a necessary step towards her boss’ plans for an ‘everything app’ which, she said, would “change how we congregate, how we entertain, how we transact all in one platform’. However, the advertising industry has serious doubts about sacrificing Twitter’s brand equity and recognizability overnight, and have called into question the extent of Yuccarino’s influence – and therefore her ability to really drive the change that the platform needs if it is to bring advertisers back into the fold. Many of her goals seem to be in direct contrast to Musk’s – will it be reason or vision that wins out?

X needs to strike while Threads is down

As we explored in this article, Threads – Meta’s answer to Twitter/X – had a hugely successful launch back in July. Having reached 2.3 million daily active users (DAUs) in early July, it was down to just 576,000 DAUs by early August – and average time spent on the app was also down by three minutes. This will have come as a relief to X’s senior management, who were undoubtedly perturbed by Threads’ meteoric rise. It’s still early days though, so X needs to focus on making hay while the sun shines, before Threads implement strategic updates and starts attracting more X users and advertisers more permanently.

For advertisers looking at their social media spend for the rest of 2023 and beyond, the sensible option is to stick with the established Meta platforms (Facebook and Instagram), and of course TikTok and Snap. Brand safety is still too much of an issue at X for advertisers to invest confidently, so until Musk and Yaccarino have demonstrated that the changes they are implementing are effective and permanent, caution is wise.

value@ecimm.com

Image: Unsplash

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