Microsoft cut Twitter from Advertising Tool. No large effect in India

Microsoft cut Twitter from Advertising Tool? Won’t affect Twitter much: Experts

A few days back, Microsoft announced that from 25 April 2023 onward, their Smart Campaigns with Multi-platform would no longer support Twitter. The Microsoft Advertising feature allows advertisers to manage their social media accounts on various platforms in one place. However, this update doesn’t affect other social platforms like Facebook, LinkedIn, and Instagram. Users can already see the update on the platform.

This is a direct result of Twitter transitioning to a fully paid Twitter API platform from 29 April 2023. Twitter has indicated that all business users and 3rd party Apps Twitter API access would be significantly restricted and will be charged for the Twitter API at 42000 to 210,000 $/month. Twitter is miffed at (a) 3rd party businesses developing applications around Twitter and (b) lots of businesses using the free Twitter API facility to train their chatbots (Read ChatGpt etc.)  on large language models (LLM) for free. This is considered as exorbitant and already, many small and large enterprise users have decided to forego Twitter.

Meaning of ‘removing Twitter as a social media tool’

The reduction in marketing involvement on Twitter is concerning, as it could severely impact the platform’s future. Twitter has been a popular advertising medium, but if advertisers lower their spending on Twitter ads or go to other platforms, Twitter’s earnings may suffer. This could affect Twitter’s ability to innovate, improve the user experience, and compete in the digital advertising industry. Furthermore, the absence of advertiser involvement may decrease user engagement on Twitter, impacting overall content quality and user activity. Says Pavan Punjabi – Chief Integration Officer Makani Creatives.

What will be the effect of this development on other (Indian) brands?

Sahil Shah, President – Digital Experience, DENTSU CREATIVE IndiaFrom an advertising community point of view, Twitter has been an issue for brands globally. Some brands pulled out of the platform due to having issues with how Elon Musk is running the platform. It is not surprising. But considering the Indian market, not many advertisers use Microsoft as a platform for digital marketing. It may not impact Twitter in this region. However, Twitter is attacked and targeted. As I have read, Elon Musk has accepted that they have laid around 80% of the staff. So the platform is a very cost-light company compared to what they were four months back. Therefore, I doubt they are too worried about advertising revenues. Though revenue comes from advertising, they must be willing to take advertising as an option. Sahil Shah, President – Digital Experience, DENTSU CREATIVE India.

Shah adds, “Most brands contribute only 5% or even less than that spent out of their digital advertising budget. So this should not affect Twitter heavily. Because it is going through a transformation, and who knows what’s next because of so many advancements that are happening within the company. Also, I think advertisers who use Microsoft advertising for seamless digital advertising would face an issue here. Otherwise, it won’t be a large issue because Twitter doesn’t contribute much to advertising spend. Microsoft isn’t a popular platform in terms of usage in India.”

The decision by Microsoft could have significant implications for other brands that used the platform for theirNeha Suyal, the co-founder at Woovly marketing campaigns. Brands that heavily relied on Twitter for their marketing efforts may now be forced to seek alternative advertising channels, potentially leading to increased competition and higher costs on other platforms. This may result in an increase in competition and potentially higher costs on other advertising platforms. Says Neha Suyal, co-founder at Woovly.

This could mark the beginning of a shift in the company’s advertising strategy. With the removal of Twitter as an advertising option, Microsoft may now focus on promoting its advertising services on other social media platforms, such as LinkedIn, which the company acquired in 2016. The decision could create opportunities for other brands to explore and adapt to new advertising platforms and reach their audience. Adds Neha Suyal.

Will other brands like Facebook and LinkedIn follow the trend of Twitter?

For a fact, Microsoft hasn’t removed Twitter because of the exorbitant amount that they are charging for the API, but because of the conflict between Elon and how Microsoft brings ChatGPT and AIs. So I think it’s not wise for Microsoft not to pay for the API. On the other hand, Facebook would not move into this charging model because it’s a publicly listed company; they have shareholders to answer, quarters to go by, and their revenue to clock. On the other hand, Elon is the whole and sole. Who knows if he wants to run a profitable company or something other which he is building (this is what Elon is known for). I don’t think Facebook and LinkedIn would move towards what Twitter is doing while charging on API, because they are very revenue-focused and advertiser-friendly platforms, unlike Twitter. Opines Sahil Shah.

How does it affect Twitter as advertisers may no longer indulge with this platform?

On Twitter, issues with user engagement and content quality can have an impact on the success of advertising campaigns. Advertisers want a secure and inviting environment for their brand messages, but concerns about false news, misinformation, and online abuse on Twitter may make them wary of associating their businesses with the platform, potentially hurting their brand image and reputation. Furthermore, the developing digital world and the availability of competing platforms with broad and successful advertising choices such as Instagram, Facebook, and LinkedIn, present fierce competition for Twitter to retain marketers’ attention and investment.

“To address these issues, Twitter must take bold steps, such as enhancing user engagement and content quality, giving extensive and transparent advertising options, and ensuring a secure environment for advertisers. Restoring advertiser trust, fostering innovation, and adapting to changing market conditions are critical for Twitter to stay relevant and competitive in the ever-changing sector of digital advertising.” Pavan Punjabi further adds.

“Twitter may lose a sizable chunk of its advertising revenue if companies using Microsoft Advertising divert their advertising spending to other platforms. This decision from Microsoft may result in increased competition on Twitter’s advertising platform, as brands previously advertised through Microsoft no longer have that option. This could increase the cost of advertising on Twitter, making it more expensive for brands.

Twitter may also get the opportunity to strengthen its advertising offerings and add new advertisers looking for alternatives to advertise their products and services. This can lead to developing new advertising products and services on Twitter, potentially leading to greater revenue.” Adds Neha Suyal.

Commenting on the issue Prof. Manoj Pant, Associate Professor of Marketing and Retail, Birla Institute of Management Technology, Greater Noida, opines, “Twitter has also lost its valuation and the ad. revenue it generates from the brand’s advertising on its platform for many other important reasons:

  1. The Twitter team strength was slashed by about 75% to about 2000 employees after Elon Musk’s acquisition. The content management team was practically removed.
  2. Twitter has decided to remove the blue legacy mark from all legacy accounts and has introduced paid blue tick marks for all its users subject to new terms and conditions. In India, the charges are Rs 900/month for IOS and Android users while web users are charged Rs 650/month. The annual charges are Rs 9400 and Rs 6800 respectively.
  3. Erratic behavior of Twitter owner Elon Musk who often tweets distasteful content which is not in sync with the brand value of many companies.
  4. Twitter is reinstating about 62K accounts banned by them which did not meet its earlier content moderation policies. This is being done under an amnesty plan by Elon Musk.

A new Twitter owner, many changes to the platform, each in a way more disruptive than before. All the above factors combined have led to about 65% of the top 1000 companies reducing their paid advertisement spend on Twitter as of Jan 2023. There is more trouble to come for Twitter ad. revenue.”

Venkatesh Umashankar, Director – Center for Online Learning &  Professor – Marketing, Great Lakes Institute of Management, Gurugram, comments on the topic: “Twitter does not seem to have the clout to make such demands, as they stand 14th among the top 15 social media platforms in terms of number of active monthly users. In January 2023, Facebook had 2958 million monthly active users, YouTube – 2514 million, WhatsApp and Instagram both with 2000 million, whereas Twitter had 556 million.”

It is clear that something will have to give, most probably from Twitter, if they want to slow down this slide. Most enterprise users will not be willing to pay for such subscriptions. The ball is firmly in Twitter’s court.

*Image by Photo Mix from Pixabay

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