What Elon Musk gets wrong about ads

Before I get to today’s essay about Elon Musk’s missteps with advertising, I want to remind you to take a look at the State of Subscriptions research report The Rebooting recently completed in collaboration with BlueConic. We surveyed over 200 publishers to get a read on the health of their subscriptions businesses and progress in shifting to audience-centric models. We found a maturing market – and hope for an uptick in growth next year.

Elon’s from Mars, Brands are from Earth

Simpler times all the way back in April,, when Elon Musk was a surprise guest at the Fontainebleau in Miami Beach to appear at one of the many industry events to cater to brands and the ecosystem that surrounds them.

Musk was off to a rocky start as the disruptive new head of Twitter, but showing up always goes a long way, and marketers love the attention of a celebrity. Musk was able to allay some fears by simply by not frothing at the mouth in a mostly softball interview at Possible with NBCU’s head of ad sales who he would hire as Twitter CEO shortly afterwards. And bringing one of his many kids on stage with him is never a bad ploy to humanize himself. We’re all in sales and branding, after all.

The picture is quite a bit darker now. The debates over Twitter’s approach to content moderation have morphed with Musk’s own congenital Beavis and Butt-Head urges to utter the outrageous has brought him to telling the same people in that room at the Fontainebleau to GFY with the bet that he can wage a culture war against “woke” corporations. Maybe he saw Napoleon and got some ideas.

The entire affair has baffled many far less intelligent than Musk that have spent their lives in the media industry. From the start, when Musk has talked about the core of Twitter’s business – this is still an advertising business – he’s betrayed not fully grasping the dynamics, or perhaps more likely finding them utterly distasteful and nonsensical. Welcome to the media business, Elon.

In an early Twitter Space during his tenure, Musk reasoned that if Twitter could recommend a tweet to someone, they could use the same mechanisms to put an ad in front of them. As was pointed out to him before Musk cut him off, modern platform digital advertising requires layering data on impressions to micro-target specific customers with specific characteristics. Twitter never excelled at this, X does not excel at this. Instead, Musk apparently expects companies to “support” his vision of free speech that includes him personally making unhinged and inflammatory comments. The sensible brand retort to Musk would be: STFU.

That’s because supporting Musk’s ideological cause is simply not the business they’re in, despite all the gauzy purpose talk of recent years from paper towel manufacturers. As a product genius, Musk must recognize that the advertising part of the product is simply impossible to work within a 4Chan meets Four Loko communications platform

In fact, content moderation is a feature for advertisers. There’s a reason the Shannon Tweed movies were on Cinemax, not NBC. And on the internet, chat has never monetized without it. Internet message boards weren’t big businesses – and it’s taken Reddit so long to build a big ads business.

And yes, some of this is unfair and hypocritical. Twitter is a Web 2.0 platform. It’s easier to find terrible stuff on Twitter than a pure algo feed like TikTok. I can only imagine the person who had to explain to Musk the screenshot industrial complex.

Brands care about their reputations and are generally rather conservative. They have to please many constituencies, including within their own businesses. Even if Twitter could perform well – it rarely did compared to its peers – there is the problem of associating not just with the free-for-all vision Musk clearly holds for what’s now called X but with him. As Disney CEO Bob Iger explained, Musk is a “larger than life figure” who is the mascot of his various companies. This is why he can brag about not needing to advertise. It also means his brand and X’s brand are the same. There’s a downside to everything.

Everything about Musk’s actions show him to be thin skinned and in need of praise, so the rejection of him personally stung. But from the point of view of marketers, it makes sense. Twitter was never a must buy for most marketers, and there isn’t exactly a shortage of ad impressions in the world. As the great Ricky Watters said, “For who, for what?”

This is one situation where Musk has found himself without the leverage he has in most areas. In the media business, all the leverage exists on the brand side. Again, it’s why they have all the halls of fame. The only ad sellers with leverage are Google, Facebook and Amazon. They create that leverage through dominance in their particular markets and by accumulating millions of advertisers. Susan Wojcicki didn’t have to cry about censorship when advertisers “boycotted” YouTube. Mark Zuckerberg would make ritual apologies and move on with his life. Big brands aren’t the lifeblood of their businesses. They are a part of a far larger universe of demand, and big platforms have the leverage to ride out periodic outrages.

Musk could have created that leverage by doing what he has preached constantly for corporate America: Focus more on the product. That doesn’t just mean the features of X, but the advertising technology that underpins the system. Maybe ad tech is owed an apology. Perhaps it is more difficult than rocket science.

Musk is no dummy. He knows the way you get leverage with customers is by having them need you more than you need them. That would mean building ways for performance marketers to realize the same returns, with the same self-serve systems, as on Google and Facebook. That would attract far more advertisers to X and make the GFY strategy far more plausible, if still ill-advised. Twitter was always so far behind on that front, and instead catered to the brands in that room at Possible that Musk now believes are “idiots.” You make the bed you lie in.

Thanks to BlueConic for its support. Be sure to check out the subscriptions report. Send me a note with feedback by hitting reply.