The future of Twitter monetization – and its morality
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Today’s column is written by Sarah Rose, Senior Vice President of International Digital Advertising at Kinesso by IPG.
Elon Musk’s $44 billion bid to buy Twitter and take it private represents a 38% premium to the company’s stock price.
While the deal is still pending FTC approval, it’s hard for shareholders to say no to that kind of money, and the company has a strong interest in seeing this move forward.
So, what will become of Twitter? Musk said his goal is to create a safe platform for free speech that supports a democratic civilization. However, what does this really mean for advertisers and Twitter users, and how do you get there?
This is due to two factors.
1. An evolving advertising model
Marketers need trusted first-party data that can be personalized with privacy in mind. In social media environments such as Twitter, brand safety remains a concern, necessitating additional and deeper integrations with ad verification partners such as IAS, DV, and MOAT.
Musk, meanwhile, has publicly stated that a subscription-based model will enable confirmed authenticated user interaction. It protects the advertising model in a way that benefits Twitter’s ad revenue while adding another revenue stream and supporting data for better brand messaging. Additionally, those who can afford ad-free environments will support the platform’s technological innovation. This dynamic creates better value for data licenses and better supply and demand economics for advertising. It would be a win-win for all parties.
Twitter’s public record in advertising dollars is US$4.5 billion in 2021, which means that on average, it brings in $12.3 million per day from approximately 206 million daily activated users. Each user bears about $0.06 per day in advertising, which is about $2.00 per month per user. A subscription model should rival these savings globally. From an advertising perspective, this new model is compelling for marketers if the economy works to support privacy-friendly first-party data integrations.
Alternatively, Twitter’s data licensing business saw minimal year-over-year growth at a steady pace of over $500 million. It’s possible it will grow even further with the subscription model, negating any lost ad revenue. The new model would definitely be a game changer for Twitter and could increase profitability while providing better marketing execution.
2. A new moral compass
Despite all the advantages that social media platforms offer as a communication platform, they are also prone to algorithmic fake news, bot accounts, misinformation and disinformation. it’s not good for marketers, advertisers or end users.
As researcher Tristan Harris explained in a Netflix documentary, The Social Dilemma, technology is replacing the pace at which humans can understand facts, information, and associated complexities on these platforms. Musk has the opportunity to remedy this reality through the acquisition. However, monitoring hate speech and unverified information will not be enough. It will be up to Musk to introduce technology that can compete with sophisticated AI on the platform and create a better human experience. Musk’s leadership proposal could also be a strong position to protect marketers, advertisers and platform users.
An example of this technology is click-guided image streaming, where a user can enter text into a box and the AI will create a real image that is easily streamed, retweeted, and not identifiable to the human eye as “fake “.
The turning point of Twitter
While there are still many benefits for marketers on Twitter, message security is still a growing concern. Technological improvements to recognize and automate verifiable information can be essential for Twitter’s evolution into a more secure free speech platform and for advertising.
Although Elon’s background is a little hazy when it comes to media platforms, we do know that he is an open end user of the platform. His aspirations to evolve the company into a better open forum for free speech could eventually benefit the digital media ecosystem with technological improvements.
Musk has made it clear publicly that he’s not a fan of the old ad models. However, social media platforms, like other media entertainment streaming platforms like Netflix, are moving towards hybrid subscription-based business models that can benefit marketers and user experience.
We’ll see how big changes on Twitter will affect social media advertising. could end up being beneficial for technology and industry.