Toxic networks: How hate speech affects profitability

Twitter was hit by a 40% drop in ad revenue after more than 500 customers stopped their guidelines on the social network, according to the Platformer technology newsletter. And news site The Information noted that staff were assured that half a thousand major advertisers had stopped investing in the platform since Elon Musk bought it last October.

Advertising is Twitter’s main source of revenue, accounting for more than 90% of its $5.1 billion in 2021 revenue, and it’s on the decline since clients like Audi and Pfizer halted advertising there after the network’s acquisition. by the CEO of Tesla for $44 billion.

Concerns about a spate of copycat accounts, which have flourished on the site after a failed relaunch of its blue checkmark scheme for verified users, and the rise of hate speech on the platform, fueled by companies believe Musk, a self-described “free speech absolutist,” have led advertisers to pull out en masse (at the same time many users have moved to Mastodon, an ad-free Twitter).

The drop, between 40% and 35%, according to The Information and Platformer, comes as the Financial Times reports Twitter is due to make nearly $13bn in debt payments, with Musk considering options including selling a portion of his shares in Tesla or even declare Twitter bankrupt: The tech mogul sold more than $20 billion worth of Tesla stock last year to fund the deal for Twitter.

Musk acknowledged in December that Twitter faced a “negative $3 billion a year cash flow situation,” but said the company should break even after cost-cutting efforts. , including the layoff of 5,000 employees.

speeches. Inciting discrimination and violence towards specific groups based on characteristics such as race, religion, sexual orientation, gender or disability, hate speech has been an unfortunate constant in tweets, comments, images and videos containing messages offensive, threatening and demeaning.

Hate speech on Twitter has been the subject of concern and criticism due to its ability to spread hate and negatively affect users who are targeted. As such, the platform has been criticized in the past for not taking quick and effective enough action to address the problem, which has led to a debate about the responsibility of networks in content moderation and protection of security and privacy. well-being of its users.

Twitter pushed in response for the removal of content that violated its rules, followed by the suspension of accounts that actively promoted hate. And it improved the reporting and content moderation systems to identify and take action against such hate speech more quickly. However, fighting on a platform as large and dynamic as Twitter remains a challenge.

And hate speech on Twitter has certainly had a negative impact on ad revenue; When users and advertisers perceived that Twitter did not take effective measures to combat toxicity in messages, they opted to withdraw their advertising from the platform.

And this resulted in declining advertising revenue, made worse by the landing of Musk, who removed some of the hate speech rules that prohibited gender-based attacks and using the original name of transgender people who had changed their identity, among other clauses. Musk himself has spread conspiracy theories and posted anti-transgender content in interaction with accounts linked to hate speech.

And to that was added a comment about George Soros that many consider anti-Semitic. In a CNBC interview, Musk challenged advertisers to back off: “I’ll say what I want, and if the consequence of that is losing money, then so be it.”

Props. Despite the backer drain, several big tech firms have remained among Twitter’s top advertisers, including Apple, Amazon and IBM, Hewlett-Packard Enterprise and Comcast. And according to MediaRadar, the change of tide could take place with the appointment of former NBC advertising executive Linda Yaccarino as executive director of the social network, focused on stabilizing the business area of ​​the company.

“Hiring an advertising executive as CEO of Twitter will do little to fix what brands have known for months: Elon is taking Twitter down an extreme and dangerous path, and the companies that end up funding this vision are complicit,” he told Twitter. Axios Accountable Tech CEO Nicole Gill.

“We met with our parties convinced of where they are and are actively engaging with us on Twitter,” Hewlett-Packard Enterprise spokesman Adam R. Bauer responded in a statement.

“Any company that checks Twitter is endorsing the rise in racism, misinformation, and hate that Musk has fueled on his platform,” Gill added, furthering the boycott against Musk and his platform, something that happened to Facebook in 2020. , for his decision not to verify the posts of then-President Donald Trump.

“It’s amazing that Musk can’t take a break from his comments to give his new CEO some space to do the one job he needs him to do,” former Twitter executive Jason Goldman tweeted. One of those fired by the Tesla owner when he took over the company.

Insider Intelligence’s forecast suggests that Twitter will generate roughly $2.9 billion in ad revenue in 2023, after initially forecasting in October 2022 that it would earn $4.74 billion. It will be necessary to see if Yaccarino, head of sales for NBCUniversal for more than 11 years, can change that course. “I’m optimistic that this is possibly a positive inflection point for Twitter and its advertising business, and that it recoups some of the losses advertisers have experienced,” said Christopher Spong, supervisor of social media and communications at the agency. Marketing Collective.

benefited. TikTok and YouTube have been the beneficiaries of the competitor’s ad slump, experiencing growth in ad revenue and global reach.

TikTok, since its launch in 2016, has had an explosive increase in users, and has become one of the most popular social networking applications worldwide. The short video format and the ability to generate viral content attract millions while capturing the attention of advertisers. And the platform implemented various advertising options, such as native ads, sponsored challenges, and collaboration with content creators. These advertising lures were seized upon by many brands to reach young audiences, and as a result, TikTok’s ad revenue under Shou Zi has seen significant growth.

Revenue on the app went from $293 million in Q3 2021 to more than $517.7 million in Q4 2022.

In YouTube’s case, ad revenue comes primarily from ads that are shown before, during, or after videos. But it has also introduced additional advertising options, such as advertising in search results and ads on home pages. And YouTube’s ad revenue growth has benefited from the steady increase in user numbers and the platform’s ability to reach specific audiences through its ad targeting system.

YouTube, part of the Alphabet group, reported revenue of almost $40 million in the past 12 months, according to its chief executive, Neal Mohan. And the shares rose 1.65 percent to trade around $122.83. The $1.5 trillion tech giant has seen its shares rise 40 percent year to date, to trade around $123.24.

“Monetization for us first and foremost is ad-driven,” said YouTube Chief Executive Officer Neal Mohan, noting that the platform will continue to take advantage of emerging opportunities in advertising, including YouTube Shorts.

image gallery