After Elon Musk Takes Over, GM Pauses Twitter Ads
General Motors is currently pausing its advertising on Twitter because the social media platform is owned by Tesla CEO Elon Musk, the company said in a statement Friday.
The nation’s largest automaker says it’s making a difference while it reviews “Twitter’s new direction.” It said it will still use the platform to interact with customers but will not pay for advertising.
“We are working with Twitter to understand the direction of the platform under their new ownership. As a business normal with a significant change in the media platform, we have paused advertising. pay its fees,” the company said in an emailed statement.
Musk took control of Twitter on Thursday night, ending an iterative six-month round of negotiations and court wrangling over the social media platform’s purchase. Before closing the deal, he was worried about the potential loss of advertising revenue so he posted a letter to advertisers on Thursday to try to reassure them.
He says he doesn’t want the platform to become a “freedom for all things, where anything can be said without consequences,” despite his stated promise to be review its content moderation policies and promote “free speech”.
“Basically, Twitter aspires to be the most respected advertising platform in the world, strengthen your brand and grow your business… Let’s build something extraordinary together. often,” he said in the letter.
Ads accounted for 92 percent of Twitter’s revenue in the second quarter, and if advertisers are scared to leave Twitter because of its new ownership, it will be a big one, said Dan Ives, technology analyst at Wedbush Securities. disaster for the company, said Dan Ives, technology analyst at Wedbush Securities.
“It sends an ominous signal,” Ives said. “GM was first, but it won’t be the only one. We’ll have to wait and see if there’s a wave. On the day Musk closes the deal, that’s not the news he wants to hear.”
GM competes with Tesla in car sales and is making a big push to sell its own electric vehicles, although it lags far behind Tesla in total US electric vehicle sales. And electric vehicles account for only about 1% of GM’s US sales so far this year, despite an ambitious EV growth plan, saying it will stop selling gasoline-powered vehicles by 2035.
It is also unlikely that Twitter will provide any financial support to Tesla, as it is losing hundreds of millions of dollars each quarter, while Tesla, even with a disappointing quarter, is still profitable.
But Ives said it can’t be ruled out that part of GM’s motivation in pulling its ad was a shot at hitting Musk.
“It shows how they view Tesla as a competitor in the electric vehicle space,” Ives said. But he said if advertisers continue to withdraw their money from Twitter, it won’t be just the automakers.
Twitter did not immediately respond to a request for comment on GM’s statement Friday night.