Twitter Turmoil Poses Risks to the Company’s Brand

The social-media company is under a spotlight in the early days of Elon Musk’s ownership

Some advertisers have paused their advertising on Twitter.

Photo: Jeff Chiu/Associated Press

Twitter Inc.’s reputation among consumers and advertisers is at risk from the tumult unfolding under new owner Elon Musk, some branding executives and other observers say, even as some Twitter users think the change in leadership could improve the platform.

Mr. Musk, who closed his acquisition of the social-media company on Oct. 27, fired Twitter’s top executives, laid off about half its staff and floated several ideas for changes to the way the platform works. Some advertisers have paused their advertising on Twitter, largely either out of concern that Mr. Musk might weaken content moderation, potentially leading to more hate speech on the platform, or because of the uncertainty surrounding the company’s direction.

“This uncertainty and instability, entirely of Musk’s making, will quickly damage Twitter’s brand and unsettle users,” said Darren Savage, chief strategy officer of Omnicom Group Inc.  -owned digital marketing agency Tribal Worldwide London.

But the new era at Twitter could also be an opportunity for the company to redefine its brand for the better.

Sixty-four percent of Twitter users said Mr. Musk will have a positive impact on the product, according to a survey of 1,212 adults who use the platform by polling firm Harris Insights & Analytics between Oct. 28 and 30.

The platform also has gotten an incredible amount of publicity since Mr. Musk’s takeover, said Tim Calkins, marketing professor at Northwestern University’s Kellogg School of Management. “And in many ways, that’s great news for Twitter, because now people are thinking about Twitter for the first time in a very long time,” he said.

But it remains unclear what Twitter under Mr. Musk will actually be, Mr. Calkins said.

Twitter didn’t respond to requests for comment.

Mr. Musk has indicated that he wants Twitter to be less restrictive about what users can share, and in his first weekend as owner posted a link to a conspiracy theory about the assault on the husband of House Speaker Nancy Pelosi. He later deleted the tweet, and more broadly has said he would form a special council to tackle questions of content moderation.

Twitter will likely have to prove it can keep advertisers “safe” from appearing near content they might find concerning, while assuring those advertisers that they aren’t helping to fund a platform that allows racist or hateful content to flourish, ad executives said. 

“Advertisers are thinking about how their dollars spent on the platform could be perceived as their direct support of Elon’s personal views,” said Toni Box, senior vice president of social media at media agency Assembly, part of ad holding company Stagwell Inc. “And Musk’s own personal tweets are being questioned in regard to brand safety and adjacency, so this could be very damaging if it’s not addressed quickly.”

Howard Belk, co-CEO of Omnicom Group brand consultancy Siegel + Gale, said the events at Twitter are likely changing the way people view it. “Recent turmoil at the company has had the effect of objectifying Twitter, raising the question with users and advertisers of whether Twitter is a safe media channel to desired consumers, or merely a plaything for Musk and a misinformation tool for bad actors domestically and around the world,” he said.

Twitter will now need to work to communicate with users in an attempt to mollify them, or risk potentially losing them, Mr. Belk added.

Twitter before Mr. Musk weathered a number of controversies that rattled some advertisers and users.

The number of Twitter’s monetizable average daily active users increased to 237.8 million in the second quarter this year from 229 million in the first quarter and 206 million a year earlier.

The company’s marketing team over the years developed advertising campaigns that positioned Twitter as a place for people who wanted to quickly know what was happening in the world and bring their most authentic selves to the internet. Ads aimed to boost the platform’s active user base by mimicking or reproducing the often-irreverent copywriting displayed by users on the platform. It ran a commercial during the Oscars in 2018. 

But news coverage and Mr. Musk’s tweets could continue playing a big role in perceptions of Twitter because the company’s ad spending is relatively modest, and recently declining.

The company spent $1.4 million to advertise itself in the U.S. from January through August of this year, down from $2.2 million in the equivalent period a year earlier, according to estimates by research firm Kantar Media. Those figures include media such as TV, radio, outdoor ads, magazines and the internet, but exclude social media.

By comparison, advertising to promote the hot social-media platform TikTok in the U.S. from January through August totaled $51.6 million, up from $32.7 million in the same months of 2021.

“The brand drives strong engagement and relevance with their core users and has achieved significant presence in culture,” said  Andrew Miller, an executive strategy director at Interbrand, a brand consultancy owned by Omnicom that annually ranks companies’ brand values. 

But this is a potential inflection point for Twitter, Mr. Miller said. “When brands go through business change, either being acquired, merging, or going private in this case, one of the most important near-term objectives is to assuage the concerns of the user and customer base to minimize attrition through the transition.” 

Twitter’s brand would benefit if its new owner took a step back from micromanaging day-to-day operations and avoided unhelpful tweets, including a new one Friday about a “massive drop in revenue” from advertiser cutbacks, said Aaron Kwittken, founder and chairman of Stagwell public-relations firm KWT Global.

“I think the brand is irrevocably damaged, actually, unless and until Musk finds somebody else to run Twitter,” Mr. Kwittken said. “People used to say Twitter was like a town square. It’s really becoming more of a gladiator arena.”

Write to Patrick Coffee at patrick.coffee@nzm7.com, Megan Graham at megan.graham@nzm7.com and Katie Deighton at katie.deighton@nzm7.com

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