October 28, 2022

Elon Musk’s Twitter Reign Begins

3rd + Lamar

After months of legal drama and will-they-won’t-they, Elon Musk officially bought Twitter for $44 billion on Thursday.

The billionaire business magnate and CEO of Tesla immediately ousted chief executive officer Parag Agrawal, chief financial officer Ned Segal, and chief legal officer Vijaya Gadde and appointed himself CEO.

Some Twitter users tweeted that they plan to leave the app, while Musk’s supporters are excited about the coming changes.

Musk has previously said that he is against Twitter bans and calls himself a free-speech absolutist (though he has a long history of limiting his employees’ free speech and interfering with journalistic coverage). But amidst speculation that Musk will revoke former president Donald Trump’s Twitter ban (for inciting violence), as he previously vowed, he tweeted that he will create a “content moderation council” before making any major decisions.

More relevant to us, however, is Musk’s message to Twitter advertisers. He affirmed that the platform “obviously cannot become a free-for-all hellscape.”

Previously, Musk said that he “hates advertising” and wants to reduce Twitter’s reliance on ad revenue.

Once he acquired the company, his tone noticeably shifted.

“Twitter aspires to be the most respected advertising platform in the world that strengthens your brand and grows your enterprise.”

-Elon Musk

In order to pay for Twitter, Musk contributed $27 billion in cash (partially by selling $15 billion worth of Tesla shares), took out $13 billion in bank loans, and received $5.2 billion from equity investors.

Ad sales accounted for more than 90 percent of Twitter’s revenue in Q2.

With Meta, Snap, and YouTube advertisers pulling away due to economic concerns, Twitter will likely face low advertising demand in the months to come regardless of Musk.

In Q3, Meta’s profit fell 52 percent due to a drop in advertising demand, according to Marketing Week.

unilever plans to continue to increase marketing spend

Amidst inflation and some advertisers pulling back spend, British consumer goods company Unilever said it plans to continue upping its marketing spend and raised its prices 12.5 percent this week.

Unilever owns more than 400 brands, including Hellmann’s, Ben & Jerry’s, and Dove.

According to Unilever’s website, 81% of those brands are top two in their market, and CEO Alan Jope said yesterday that 80% are holding or gaining “brand power.”

“[Our customers are] having to make trade-offs to respond to higher costs of groceries and utilities, and they’re deploying a range of coping strategies for that. For example, we saw private label penetration grow in some categories, such as in-home ice cream and household care.”

-Graeme Pitkethly, Chief Financial Officer of Unilever

Other news

  • McDonald’s CEO Chris Kempczinski credits marketing promotions, including the “McRib Farewell Tour,” for increased sales in Q3.
  • “Streaming now accounts for about 37 percent of all TV viewing in the U.S.,” according to Bloomberg and Nielsen. YouTube and Netflix lead.
  • Our favorite ads of the week are these creative throwback condom ads.

That’s all for this week‘s Marketing Roundup. Check back next week for more news. And subscribe to our newsletter below for additional updates.