Today in Digital Marketing - 3,738.

Starting point is 00:00:00 It's Friday, November 4th. Today, Twitter suffers a massive drop in revenue from advertisers as brands flee and users delete their accounts. We have extended coverage today. Also, borrowing video thumbnail secrets from the best, the metaverse gets a vote of no confidence, TikTok comes for Spotify, and a nasty bug at Google Ads is affecting sales reporting.

Starting point is 00:00:24 I'm Todd Maffin. Here's what you missed today in digital marketing. 3,738. That's how many Twitter employees were up for firing this morning, as reported by the New York Times. We don't know the final numbers and probably never will, but there's no doubt it's at least close to that. Insider reports that more than a thousand people had already been let go by about 11 o'clock last night. The official layoff notices weren't due to come out until this morning. The day started with a surprisingly frank tweet from Elon Musk admitting that advertisers are dropping like flies. The new CEO tweeting this morning, quote,

Starting point is 00:01:01 Twitter has had a massive drop in revenue due to activist groups pressuring advertisers, unquote. But is it really due to activism? In fact, the exodus of advertisers actually started when Musk first announced his intentions to buy Twitter. According to Media Radar, Twitter had 3,900 advertisers in May. That number plummeted to 2,300 by August. The New York Times reports today, quote, there were more than a thousand new advertisers on the platform each month before July when Mr. Musk's feud with Twitter began to intensify and the number of new advertisers sank to 200, unquote. October's numbers, which will certainly be interesting, are not available yet.

Starting point is 00:01:44 Most people who watch the space say the advertising revenue is down not because of any sort of organized activism, but because brands, especially the big spenders, are notoriously cautious of massive change. And they fear Musk's planned loosening of the content reins will damage their brands. Not to mention his reported plans to add an OnlyFans-like porn video model. I can share some anecdotal data from our own agency. We handle social media engagement in moderation, so we see firsthand when consumers are angry at brands. And, briefly, right after the acquisition, there was indeed an uptick in people mass-tweeting a couple of our clients who were running Twitter ads at the time. It was only on Twitter, and it didn't seem organized in any way.

Starting point is 00:02:28 Since then, really nothing. Also, let's not forget that Twitter has never been an A-list player in the world of digital advertising. It's not even in the top 10 of online ad sales, far behind Google, Amazon, and Meta in revenue. Also, quoting Business Insider, with advertisers looking to trim costs this year amid the gloomy macroeconomic climate, some might find it easier to cut Twitter from their media plans rather than waiting to see what the new management team has to offer, unquote. Musk is right about the first part, though. Advertisers' media spend

Starting point is 00:02:59 appears to have crashed since he took over. Among the companies which have stopped advertising on the platform, General Mills, Audi, Pfizer, GM, Volkswagen, and Mondelez, whose name you might not know, but that's the owner of big CPG brands like Ritz, Chips Ahoy, and Trident Gum. Mondelez is among the top 20 advertisers on Twitter in terms of ad spend. IPG, one of the world's largest ad companies, recommended its clients pause their Twitter ad campaigns because of concerns over moderation. IPG's clients include Coca-Cola, American Express, Johnson & Johnson, Mattel, and Spotify. The large agency Havas has also recommended a halt of Twitter ad spend. Musk did spend a bit of time this week on a Zoom call with about 100 advertisers,

Starting point is 00:03:46 those in the company's so-called Influence Council. People on the call reported that he said all the right things, but without much in the way of detail. So let's quickly run through the changes Musk has made which has spooked advertisers, specifically three areas, tools, teams, and people. First, the tools. Within hours of the takeover, Twitter shut down employee access to content moderation and policy enforcement tools. This was done under the guise of protecting the company, but it was never clear what it was protecting itself from. Musk this week said he'd turn them back on, but there's no word that ever happened. If those tools remain off or even scaled back, then negative and, well, let's just say brand unsafe content like overt racism, homophobia,

Starting point is 00:04:32 personal threats, blatant misinformation will seep onto people's Twitter feeds. One thing any content moderation tools will likely give a pass to, though, are tweets from Musk himself. It was only days ago that he tweeted a bizarre and easily debunked claim that US politician Nancy Pelosi's husband wasn't actually attacked, but rather got into a drunken dispute with a male prostitute he'd hired. It was nonsense, of course, and there are some brands which will happily support that kind of content. But the ones with the big wallets won't want their name and logo to be anywhere near it. For advertisers, it's not about politics or free speech or activist pressure.

Starting point is 00:05:12 It's about brand safety, pure and simple. Then there are the teams. In the mass firings today, Elon Musk has all but wiped out entire teams dedicated to keeping the platform brand safe. The firings have shut down the Ethical AI team, which was an internal group working to make Twitter's algorithms more fair and transparent. He fired a team known somewhat unfortunately as META, that's an acronym. The group had been doing research on political bias that might have helped Twitter from unfairly penalizing specific viewpoints. Essentially, groups which were trying to keep the Twitter feed from becoming a hateful stream of negativity have been shut down. Even teams devoted to just basic communications have been eviscerated.

Starting point is 00:05:55 Reports say that Twitter's entire PR and communications group, which was about 100 strong, is now down to just two staff members now. And perhaps most importantly, the people. People with the direct relationships with advertisers. People whose job it was to reassure brands that they'd work to make sure the platform would perform well for them. The CMO, the VP of Global Client Solutions, the executive in charge of its ad business and brand partnerships, the managing director of the company's Canadian operations, the public policy director for the U.S. and Canada, the head of people and diversity, all gone. Today's layoffs are said to represent half of the company's entire workforce. I should note that in between all the Twitter news, other tech companies are doing large-scale layoffs today as well. A 14% headcount reduction

Starting point is 00:06:46 at Stripe, 13% at Lyft, 18% of staff gone at Opendoor, 14% at Stripe, 12% laid off from Chime. Of the people left at Twitter, The Verge reports today those people, quote, are working furiously to meet Musk's drop-dead deadline of Monday to ship his revamped paid verification system. They've been told if they don't meet the deadline, they will all be fired, unquote. It's also interesting to see how Musk is handling his role as CEO. Nobody thought he'd be a hands-off manager. To the contrary, we know from his SpaceX and Tesla roles, he's very involved. But with Twitter, he's so involved that he appears to either be making decisions on an individual

Starting point is 00:07:30 account level or directing his new management staff to. The Twitter account of his ex-girlfriend Amber Heard was suddenly and mysteriously shut down a couple of days ago. And after U.S. politician Alexandria Ocasio-Cortez tweeted her thoughts about Musk's plan to charge for verification, her account was also disabled. Lest you think that was an unfortunate coincidence, Musk basically admitted to shutting her account off, tweeting, What can I say? It was a naked abuse of power. So much for free speech. But everyone, Musk, financial analysts, brands, everyone knows that at the end of the day, what matters are users. The fewer people, the less appealing the platform is to media buyers.

Starting point is 00:08:12 So far, around 900,000 Twitter accounts have been deactivated by users. To be fair, that's still only a drop in the bucket. The company's most recent quarterly statement said they had 238 million monetizable daily active users. Which brings us back to Elon Musk's tweet this morning about activists and advertisers. A tweet which ended with two sentences. Extremely messed up. They're trying to destroy free speech in America. Well, at least one of those sentences is true. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen.

Starting point is 00:09:14 To other news now. Mr. Beast, the fifth most followed YouTuber, is the king of social hooks. Marketing Brew has a great think piece up today looking at his formula and how your brand can do the same. Social media hooks are typically associated with video, those first few seconds that capture attention. But the article's author suggests there are actually three hook points he exploits. Thumbnail, caption, and video. So how does Mr. Beast build these content hooks? Based on his YouTube thumbnails, he's a big supporter of the so-called YouTube face.

Starting point is 00:09:48 Eyes wide and mouth agape. Basically a close-up of an over-the-top human reaction to attract viewers. When creating thumbnails, brands should consider a human face that conveys a big emotion, large readable text that's clearly understood, high quality imagery, and action shots. Now for the caption hook. The piece suggests the best copy approach is to plainly state why the audience should care. For instance, Mr. Beast's latest video features six different hotel rooms, all at different price points. The hook he chose, $1 versus $1 million hotel room. And finally, the video hook. The author notes that these hyperbolic sentence prefixes you see

Starting point is 00:10:31 on TikTok really do work. Things like, you won't believe, and things I wish I knew before I was 30. Referring back to Mr. Beast's latest video, he yells, I rented a $1 million night hotel room. No long introduction, no spiel, just the most straightforward explanation of the video's premise. Things have taken a turn for the metaverse. Research company Crutchbase reported today that funding to companies in the VR, AR, and virtual worlds categories has been declining quarter over quarter since its peak late last year. How bad is it? Despite reaching more than $2 billion

Starting point is 00:11:11 in the fourth quarter of 2021, Metaverse-related funding has fallen to around $760 million in the most recent quarter. The third quarter was also lower than Q1 and Q2 of this year, and the company is expecting Q4 funding to plummet to just $200 million. On an annual basis, looks like 2022 will come in well below 2021 in terms of metaverse and VR-related venture funding.

Starting point is 00:11:38 Still, investors aren't abandoning the category, and some big deals are still happening. The startup research company said at least seven metaverse and augmented reality-related rounds of $100 million and up have closed so far this year. Crunchbase added it's also seeing several deals across similar themes like avatars, health-related applications of VR, and gaming. Finally, on the public markets, investors seem bearish lately on companies most closely linked to metaverse content and 3D content. It's not just meta. TikTok owner ByteDance is reportedly getting ready to launch its music streaming service TikTok Music, rivaling Spotify and YouTube Music. Along with recent discoveries of TikTok music trademarks in global markets, TechCrunch recently found references

Starting point is 00:12:28 to a TikTok music service in the Reso streaming app, which is also owned by ByteDance. TechCrunch suggests these references could hint that the China-based company might sync user activity between the two apps. Whether TikTok will test its music service globally under the Reso moniker or launch a separate app is unclear. The company's also launched a website, music.tiktok.com, for some

Starting point is 00:12:52 regions. Clicking the download button on the site, though, pops up a display that says, we are working hard to bring you the desktop version. Check back soon. Meanwhile, the mobile version suggests that the download button will take users to the Apple App Store or the Google Play Store. Finally, a few more signs that point toward the launch, including the site's Terms of Service were found, which uses the brand TikTok Music. And the company has also created verified TikTok Music branded social media handles on Twitter and Instagram. And finally, Google this morning reported it had found a bug in its ads platform, specifically a drop in website conversions reported. So if you're noticing your sales number down, that could be the actual issue. At our deadline time,

Starting point is 00:13:38 Google said they had identified the issue and were backfilling all delayed conversion data. Well, all this Twitter stuff had me check LinkedIn out, which I hadn't spent a ton of time on previously, but I am mostly there now and posting more details about the stories that we cover on the show. So search for me on LinkedIn, or to make it easier, just swipe over to the show notes and tap the link near the top. Follow me there and get more digital marketing breaking news.

Starting point is 00:14:10 Today in Digital Marketing is produced by EngageQ Digital on the traditional territories of this dynamic first nation on Vancouver Island. Our associate producer is Steph Gunn, production coordinator Sarah Guild, podcast music licensing by Source Audio, ad coordination by Red Circle. And not many people know this, but our theme composer, Mark Blevis, is one of the world's foremost experts on social media content moderation. I was talking to him this morning about the future of Twitter and everything, and he reminded me, poets, priests, and politicians have words to thank for their positions.

Starting point is 00:14:48 Words that scream for your submission and no one's jamming their transmission. I'm Todd Mappin. Have a restful weekend, friends. I'll see you on Monday. I'm out.

Today in Digital Marketing - 3,738.

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