It’s only been three months since Elon Musk took over Twitter, and his time has been rough, to say the least. His first month in charge saw many layoffs, a new revenue stream led to mass adoption, and the CEO at one point closing the doors to the company’s San Francisco headquarters.
As a result, Twitter is accused by former employees who complain about the rise of the service, reporting on the flow of money, and the type that evaluates whether they should work on the platform at all. Drug company Eli Lilly, for example, had its price cut after a fake account with a blue payment tick claimed to offer free insulin. The rocky start has also put advertising money – the main source of Twitter’s income – in doubt, with large companies withholding funds due to instability.
The rise of social media was seen as a new dawn of communication and marketing, giving companies the tools and means to reach customers directly. Turmoil on Twitter, combined with the ups and downs of platforms like Instagram, Facebook and TikTok, means that brands may need to evaluate how they can move beyond social media for the better.
Financial turmoil is an unpredictable future
The shake-up of Twitter and its policies, especially related to content and free speech has caused businesses to rethink their position on marketing through the platform, says Madeleine Sampson, researcher of telecommunications, media and technology at Fitch Solutions.
“Companies such as General Motors, Audi, VW, and Pfizer have all stopped advertising on the platform and have taken a ‘wait and see’ approach,” he says. they are condemned for ceasing to associate with ‘free speech’ or following the ‘awakened way’.
“All of this comes at a time when companies are already recouping their investments due to inflation and rising operating costs. As a result, the tech giant is suffering from a year-over-year decline in sales.”
The financial growth is not helping the ad business Twitter depends on, nor is Musk’s mismanagement, or the platform’s demise. Users have said that the platform can be completely destroyed, and anyone who claims to be able to predict what will happen in the future is – as Rebecca Wettemann, CEO of the industry analysis company Valoir says – “full of it”.
“I think a lot of CMOs have been pulling their hair out for the last month trying to figure out what’s going on,” he says. “We’re seeing a number of challenges for companies and retailers as they think about how to reach customers. Twitter is one part of that, and Twitter’s concerns are part of that.
“But we also have to think about what’s happening with the removal of cookies, and other challenges that marketers are trying to achieve this goal of being able to create personalized experiences for customers.
“In the short term, we’re seeing Twitter’s revenue coming back, but we’re also seeing companies looking at other tools and technologies to help them understand what they can get from Twitter versus other sources.”
Brands are falling in love with social media
The question of quality can change from debating the amount of presence on platforms like Twitter – to those asking whether it is worth to be present at all on popular social networks, based on the risk. It’s especially true because of the old adage of businesses wanting long-term certainty.
One of Twitter’s many roles is to be a point of contact for frustrated customers. When all else fails, after being driven around by chatbots or spending half an hour on the phone, a sales call on Twitter is a rare occurrence.
Add to the Twitter pile-on problem, where many people are against a brand or person, and businesses can feel caught between a rock and a hard place. However, Chris Bignell, founder of XL Communications, says that a social media approach can prevent this, and that businesses are called in because people feel like they have nowhere else to go.
“It’s easy for brands to be mentioned on Twitter, and I think that’s why people jumped on it because it’s a way to shame a company,” he says. “But I think a lot of people turn to Twitter because it’s responsive. This has led businesses to move their call center staff to Twitter, instead of answering calls, which means that by embarrassing the company publicly, the customer can get results faster.
Does it come after social media?
As Bignell points out, Twitter’s current challenge is not just how it’s managed, but maintaining the channels brands rely on to communicate directly with customers. Wetteman says joining channels of communication, whether through email, phone, social media, or on their website, can help reduce their reliance on Twitter. Most brands have a lot to learn when it comes to communicating with customers, he adds.
“There is a lot of interaction that takes place before ‘one-to-one’ communication, and some of the most interesting and innovative things I see is the use of artificial intelligence (AI) to understand, not only when a customer makes one connection, but what it happens long before this happens,” he continues. “Businesses want to understand what customers search for, what they do on local sites, what they do on the website, to understand what they need to do to delight the customer, instead of just talking to chatbots.”
As the market is looking away from social media, the question of what comes next is still there – whether it’s another social media or Twitter, or something different, like the phenomenon of the metaverse.
Things don’t look like they’re going to change on Twitter anytime soon. As Sampson points out, stopping advertising isn’t good for Twitter’s bottom line, on top of the users it might drop. “Approximately 90% of Twitter’s revenue comes from advertising, but the introduction of the Twitter Blue subscription service, in order to create new revenue streams, could see advertising take a back seat and become irrelevant to advertisers for a long time,” he says. “Musk said he wants to create ‘the most respected advertising space in the world’, but it is too early to say what the impact of Musk’s reforms will be on the number of Twitter users, which is one reason why some companies are biding their time before making a final decision.”
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