Elon Musk appears to have decided that one way to instill trust in Twitter as an advertising platform is to become an advertiser himself. A media outlet reported that SpaceX bought one of Twitter’s premium advertising packages, noting that SpaceX rarely invests in advertising on Twitter, amid plans for SpaceX, another Elon Musk company, to start advertise. advertising Starlink satellite Internet to customers in Spain and Australia. According to internal documents reviewed by this media, SpaceX has so far spent $160,000 on the Twitter advertising campaign and in total may invest up to $250,000.
According to Musk, the fact that SpaceX is buying this advertising package is nothing special. The SpaceX and Twitter CEO challenged the media outlet’s qualifier for describing the ad investment as “significant”.
Elon Musk’s aerospace company SpaceX has ordered one of the largest advertising packages available from Twitter, the social media company he just bought in a $44 billion deal and of which he is now CEO. The campaign will promote the SpaceX-owned and operated satellite internet service called Starlink on Twitter in Spain and Australia, according to internal social media company records seen.
The ad campaign that SpaceX is buying to promote Starlink is called a Twitter takeover. When a business buys one of these plans, they typically spend more than $250,000 to put their brand at the top of Twitter’s main timeline for an entire day, according to a current and former Twitter employee who asked. who are not named because they are not authorized to speak on behalf of the company.
Users are expected to see Starlink-branded posts the first three times they open the Twitter app on the day or days of the planned acquisition campaign in Australia and Spain. The campaign, which was purchased last week, is due to air in the coming days first in Australia and then in Spain.
In general, SpaceX has not bought large ad packages on Twitter, current and former employees said.
Hours after this story was first published, Musk wrote in a tweet: SpaceX Starlink purchased a small, not-so-large advertising package to test the effectiveness of Twitter advertising in Australia and Spain. I did the same on Facebook/Insta/Google.
According to internal documents seen by CNBC, SpaceX has so far spent more than $160,000 on Twitter ad campaigns for Starlink in Australia and Spain.
Starlink uses a constellation of satellites that beam internet to paid subscribers who also need to get SpaceX terminals to access it. SpaceX developed Starlink with the goal of providing high-speed internet connectivity to people in areas that are underserved, if at all, by cable or fiber optic infrastructure.
In Ukraine, the Starlink service provided vital connectivity to the country’s military and some civilians as Russia’s brutal invasion wiped out the communications infrastructure there. While SpaceX covered some of the costs of providing the service to Ukraine, Musk later complained about how the donations hurt his company’s profit margins.
Pressure on Twitter ad sales
Musk is also the CEO of electric vehicle manufacturer Tesla, in addition to his responsibilities at SpaceX and Twitter. He is proud that his automaker does not spend money on traditional advertising such as print, radio, TV and online ads. Instead, Tesla collects headlines from fan blogs, news sites, and creates buzz through auto clubs, fan or shareholder events, and social media engagement.
Musk now finds himself in the position of having to sell online advertising as the Chief Twit, or more formally CEO, of Twitter, which remains the main international social media platform. Twitter had about 237.8 million monetized daily active users before Musk’s controversial privatization deal. Musk is on a mission to generate at least half of Twitter’s revenue from followers, not just advertising.
A campaign, even on the scale of an acquisition, is not enough to compensate for the loss of many advertisers who recently stopped their spending on Twitter or fled the platform during Musk’s rocky acquisition.
Companies like General Motors, Audi, Volkswagen, General Mills, Pfizer, United Airlines and others have suspended ad spending on Twitter for now, in part because of a wave of hate speech and misinformation that has plagued the platform . Advertising major brand Interpublic Group recommends that its agency clients do the same. Twitter previously got about 90% of its revenue from advertising.
When Musk launched and then quickly suspended a paid subscriber badge on Twitter last week, it further shook advertisers’ trust in the platform. The badge looks like a blue check mark from a previous verification and costs users $7.99 per month. The cheaply acquired blue ticks have been used by pranksters and imposters to impersonate brands, politicians and celebrities and post unappealing and inaccurate messages.
An account pretending to be pharmaceutical company Eli Lilly caused serious trouble on Thursday when it posted a message saying: “We are happy to announce that insulin is now free.” The tweet went viral and remained on Twitter for at least two hours before being deleted. Eli Lilly’s real account tweeted: We apologize to anyone who received a fraudulent message from a fake Lilly account.
Eli Lilly’s share price fell sharply after the fake tweet was posted, although major stock indexes were positive at the time, with the S&P 500 posting its biggest rally in two years. Musk-led automaker Tesla, SpaceX competitor Lockheed Martin, Sen. Ed Markey (D-Mass.), and many others were also imitated and pilloried on the platform.
This weekend, Musk wrote in a tweet: Twitter generates a large number of clicks on other websites/apps. By far the biggest click-driver on the internet.* Twitter’s new CEO was quickly corrected by marketing experts and former Twitter employees, and a correction note was added to his tweet. He later deleted the tweet.
A former Twitter employee, Claire Daz-Ortiz, called in, writing: These are lies. I worked at @twitter for 5 years + wrote 2 books on social media marketing. This is wrong and @twitter knows it. We haven’t sold on clicks yet, because we have less traffic than Facebook, LinkedIn, etc. Twitter has other important assets (and marketing goes beyond clicks).
The threat of bankruptcy
A transcript of a staff meeting with Elon Musk shows various employees trying to figure out what their priorities should be to help Musk keep Twitter afloat while the economy remains sluggish. Musk kept his answers brief and said top priorities include growing Twitter’s user base by a billion (while growing more users is critical), satisfying creators in the shape of the platform and improving of Twitter search. In short, he told the remaining members of his team to “just go hardcore” to make Twitter more compelling, so he could sell this product to users, or else leave altogether. One of his biggest and most widespread ideas, which he says is “definitely happening”, is to transform Twitter into a digital payment platform.
If you have a compelling product, people will buy it,” Musk told staff. This has been my experience with SpaceX and Tesla.
Musk’s brutal honesty about Twitter’s potential bankruptcy has raised doubts about the platform’s survival of Musk’s leadership style. In addition to Twitter having $13 billion in debt when he bought it, then losing $4 million a day in ad revenue, Musk now faces interest payments that Reuters says will total nearly $1.2 billion in the next 12 months.
Those interest payments, Reuters said, would represent more than Twitter’s last cash flow of $1.1 billion in June. And Musk’s team seems aware of this risk, feeling compelled to perform well and asking Musk how he plans to solve the cash flow problem.
We really need to bring in more money than we spend,” Musk replied. If we don’t and there’s massive negative cash flow, then bankruptcy won’t be out of order.
Some wonder if Musk is using the term as a way to encourage staff who feel connected to the platform to give it their all to survive. It should be noted that Bloomberg has said that Musk has used the threat of financial ruin in the past to motivate his employees. “He’s trying to convey the idea that if people don’t work hard, Twitter is going to be a really difficult place,” said Bloomberg, a person familiar with Musk’s management style.
Of course, the threat of bankruptcy does not only affect the staff. Bloomberg said debt investors and credit analysts alike were concerned about Musk’s comments, sending inquiries to hedge funds and asset managers to see if anyone wants to buy back some of the debt. lower rates from Twitter. Banks that helped finance Twitter with $6.5 billion in leveraged loans could face billions in losses, according to Bloomberg calculations.
As banks weigh the options available in this environment, Musk continues to pump money into Twitter, selling $4 billion worth of Tesla stock to save Twitter, The New York Times reported.
What do you think of SpaceX’s ad spend on Twitter? How do you evaluate this situation in light of comments from Twitter employees who say that SpaceX has underspent on its platform and Elon Musk who insists that his company did the same with Facebook, Instagram and Google? The tree that hides in the forest?
Is this approach likely to attract advertisers? Why?
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