Elon Musk’s SpaceX has bought Twitter ads, usually worth $250,000, for its Starlink satellite internet service — the social network sees advertisers flee and in some cases funnel their money to competitors like Google and Meta.
The Starlink campaign will promote the service on the platform that Musk just bought for $44 billion in Australia and Spain, according to internal documents seen by CNBC.
Twitter has faced an exodus from advertisers since completing Musk’s deal. The Starlink ad purchase comes as the company enters a crucial time of year when it typically strikes deals with advertisers who bring in 30 percent of its annual revenue, the Wall Street Journal notes.
Many of the discussions that led to such deals have reportedly never been put into place or have been paused due to the ongoing uncertainty surrounding Twitter – with features being changed or removed without notice – and the fact that the social network’s ad sales department is in shambles.
SpaceX has just asked Elon Musk for a large Twitter ad package, usually worth $250,000, for its Starlink satellite internet service — as the social network sees advertisers flee and in some cases funnel their money to rivals like Google and Meta.
Starlink uses a constellation of satellites to provide high-speed, low-latency Internet in locations that are underserved or unable to access fiber optic or cable infrastructure.
Starlink’s campaign is known as a “takeover” on Twitter and typically puts the company’s brand at the top of the network’s main timeline for an entire day, with most users in those two countries seeing the messages the first three times they open the app while the campaign is active, according to staff. Current and former Twitterers who spoke to CNBC.
In response to CNBC’s report, Musk took issue with how the outlet described ad buying, writing: “SpaceX Starlink bought a small — not a large — ad package to test the effectiveness of Twitter ads in Australia and Spain. Do the same for FB/Insta/Google.
Starlink uses a constellation of satellites to provide high-speed, low-latency Internet in locations that are underserved or unable to access standard fiber-optic or cable infrastructure. Those who wish to use it must have terminals, built by SpaceX, and subscribe to the service.
Advertising giants Interpublic Group and Havas Media both recommended customers to pause their ad spending on Twitter. The Omnicon Group, whose agencies buy ads on behalf of major companies, on Friday told clients to pause Twitter spending until further notice, according to an internal document seen by The Verge.
Since Musk took over, a handful of brands including General Motors, Audi, Mondelez International, Volkswagen, Chipotle, General Mills, Pfizer, United Airlines and others have paused their ad spending on the network for the time being.
“We’ve stepped back from our paid and proprietary content on Twitter while gaining a better understanding of the platform’s direction under its new leadership,” Lori Shalow, Chipotle’s chief corporate affairs officer, told the Post.
One of the large consumer packaged goods companies that plans to stay out of Twitter during the first quarter of 2023 is funneling about $10 million into TikTok, streaming platforms and Google, a person close to that commercial publishing company said.
If the Tesla CEO can somehow reassure advertisers that the platform is safe for their brands, it will be difficult for him to return that revenue, according to advertising executives who spoke to the Journal, because many brands have shifted their ad spending to TikTok, Google, and Instagram.
“Brands pausing aren’t pausing those dollars, they’re spending them,” Ben Jankowski, Mastercard’s former head of global media, told the paper. Companies have brands to support. Nobody sits in possession of advertising money.”
The exodus comes at a precarious time for Musk—his acquisition of Twitter was funded with about $13 billion in debt—and he needs to boost the platform’s revenue. In 2021, ads accounted for 89% of Twitter’s $5 billion in revenue.
With everything seemingly in turmoil — from content moderation to an $8-a-month blue-label verification program — brands are worried and confused about which direction the platform will take and whether it will be overrun by misinformation and bots. and hate speech, among other concerns.
Although Musk has tried to reassure the announcements in recent meetings and video calls, it remains to be seen if that will be enough.
DailyMail.com has reached out to Twitter for comment. However, Axios reported last week that Musk had gotten rid of Twitter’s communications department all but one person.
A large consumer packaged goods company that plans to stay away from Twitter through the first quarter of 2023 is funneling about $10 million into TikTok, streaming platforms and Google, a person close to that company told the trade publication.