3,738.

Twitter: "Massive Drop in Revenue" from Advertisers

3,738. 

That's how many Twitter employees were up for firing this morning, as reported by the New York Times. We don't know the final numbers, and probably never will, but there's no doubt it's at least close to that.

Insider reports more than 1,000 people had already been let go by around 11 pm last night. The official layoff notices weren't due to come out until this morning.

The day started with a surprisingly frank tweet from Elon Musk, admitting that advertisers are dropping like flies. The new CEO tweeted this morning: 

But is it really due to activism? In fact, the exodus of advertisers actually started when Musk first announced his intentions to buy Twitter. According to MediaRadar, Twitter had 3,900 advertisers in May. That number plummeted to 2,300 by August.

The New York Times reports today:

October's numbers, which will certainly be interesting, aren't available yet.

😞 No, It's Not "Activist Pressure"

Most people who watch the space say the advertising revenue is down not because of any sort of organised activism, but because brands — especially the big-spenders — are notoriously cautious of massive change, and they fear Musk's planned loosening of the content reins will damage their brands. (Not to mention his reported plans to add an OnlyFans-like video model.)

I can share some anecdotal data from our own agency. We handle social media engagement and moderation, so we see first-hand when consumers are angry at brands. And, briefly — right after the acquisition — there was indeed an uptick in people mass-tweeting a couple of our clients who were running Twitter ads at the time. It was only on Twitter, and it didn't seem organized in any way. Since then, really nothing.

Also, let's not forget that Twitter has never been an A-list player in the world of digital advertising. It's not even in the top-10 of online ad sales. Far behind Google, Meta, and Amazon in revenue. 

Also also, quoting Business Insider:

⛔ Big-Spending Advertisers Pause Twitter Spending

Musk is right about the first part, though — advertisers’ media spend appears to have crashed since he took over. Among the companies which have stopped advertising on the platform: 

• General Mills

• Audi

• Pfizer

• GM

• Volkswagen

• Mondelez — whose name you might not know, but that's the owner of CPG brands like Ritz, Chips Ahoy!, and Trident gum. Mondelez is among the top largest 20 advertisers on Twitter in terms of ad spend.

IPG — one of the world’s largest advertising companies— recommended its clients pause their Twitter ad campaigns because of concerns over moderation. IPG's clients include Coca-Cola, American Express, Johnson & Johnson, Mattel, and Spotify. The large agency Havas has also recommended a halt of Twitter ad spend.

Musk did spend a bit of time on a Zoom call with about 100 advertisers — those in the company's so-called Influence Council. People on the call reported that he said all the right things, but without much in the way of detail.

⚒️ Tools, Teams, and People

Let's quickly run through the changes Musk has made which has advertisers spooked — specifically tools, teams, and people.

First, the tools. 

Within hours of the takeover, Twitter shut down employee access to content moderation and policy enforcement tools. This was done under the guise of protecting the company, but it was never clear what it was protecting itself from. Musk this week said he'd turn them back on, but there's no word that that ever happened.

If those tools remain off or scaled back, then negative and — well, let's just say "brand unsafe" content, like overt racism, homophobia, personal threats, and blatant misinformation will seep onto people's Twitter feeds. 

One thing any content moderation tools likely will give a pass to are tweets from Musk himself. It was only days ago that he tweeted a bizarre and easily debunked claim that U.S. politician Nancy Pelosi's husband wasn't actually attacked, but rather got into a drunken dispute with a male prostitute he'd hired.

It was nonsense, of course, and there are some brands which will happily support that kind of content, but the ones with the big wallets won't want their name and logo to be anywhere near it.

For advertisers, it's not about politics or free speech or activist pressure; it's about brand safety. Pure and simple.

Then, there are the teams.

In the mass firings today, Elon Musk has all but wiped out entire teams dedicated to keeping the platform brand-safe.

• The firings have shut down the ‘Ethical AI’ team, which was an internal group working to make Twitter’s algorithms more transparent and fair.

• He fired a team known, somewhat unfortunately, as META — that's an acronym. That group had been doing research on political bias that might have helped Twitter from unfairly penalising specific viewpoints.

Essentially, groups which were trying to keep the Twitter feed from becoming a hateful stream of negativity — have been shut down.

Even teams devoted to just basic communications have been eviscerated. Reports say that Twitter’s entire PR and communications group — which was about 100-strong — is down to just two staff members now.

And, perhaps most importantly, the people.

People with the direct relationships with advertisers. People whose job it was to reassure brands that they'd work to make sure the platform would perform well for them:

• the CMO

• the VP of Global Client Solutions

• the executive in charge of its advertising business and brand partnerships

• the managing director of the company's Canadian operations

• the director of public policy for the U.S. and Canada 

• the head of people and diversity

All gone. Today's layoffs are said to represent half of the company's entire workforce.

I should note that in between all the Twitter news, other tech companies are doing large-scale layoffs today. 

• A 14% headcount reduction at Stripe

• 13% at Lyft

• 18% of staff gone at Opendoor

• 14% at Stripe

• 12% laid off from Chime

• And so on.

Of the people left at Twitter, the Verge reports those people:

👀 A Twitter Made in Elon's Image

It's also interesting to see how Musk is handling his role as CEO. Nobody thought he'd be a hands-off manager — to the contrary, we know from his SpaceX and Tesla roles, he's very involved.

But with Twitter, he is so involved that he appears to be either making decisions on an individual account level, or directing his new management staff to.

The Twitter account of his ex-girlfriend Amber Heard was suddenly shut down a couple of days ago. 

And after U.S. politician Alexandria Ocasio-Cortez tweeted her thoughts about Musk's plan to charge for verification, her account was also disabled. Lest you think it was something else, Musk basically admitted to shutting her account off, tweeting:

So much for free speech.

🚪 The Exit Door is Open

But everyone — Musk, financial analysts, brands — everyone knows that, at the end of the day, what matters are users. The fewer people, the less appealing the platform is to media buyers.

So far, around 900,000 Twitter accounts have been deactivated by users. To be fair, that's still only a drop in the bucket. The company's most recent quarterly statement said they had 238 million monetizable daily active users.

🧹 Messed Up, Indeed.

Which brings us back to Elon Musk's tweet about activists and advertisers — a tweet which ended with two sentences: 

Well, at least one of those is true.

How To Build Deep Social Hooks

Mr. Beast, the fifth most followed YouTuber, is the king of social hooks. MarketingBrew has a great think-piece up today looking at his formula and how your brand can do the same. 

🎣 Redefining the Hook

Social media hooks are typically associated with video — those first few seconds that capture attention. But, the article's author, Jack Appleby, suggests there are actually three hook points:

1. The thumbnail hook

2. The caption hook

3. The video hook

So, how does Mr. Beast build these content hooks? 

😲 All About that Face

Based on his YouTube thumbnails, he's a big supporter of the "YouTube Face," eyes wide and mouth agape. Basically a close-up of an over-the-top human reaction to attract viewers. 

When creating thumbnails brands should consider:

• A human face that conveys big emotion

• Big, readable text that’s clearly understood

• High-quality imagery

• Action shots

✍️ Words Matter

Now, for the caption hook. The piece suggests the best copy approach is to plainly state why the audience should care. 

For instance, Mr. Beast's latest video features six different hotel rooms, all at different price points. The hook he chose: “$1 vs. $1,000,000 Hotel Room!” 

🎥 Video Hook 

Finally, the video hook. Appleby noted that those hyperbolic sentence prefixes you see on TikTok really do work, such as:

• “You won’t believe…”

• “Things I wish I knew before I was 30…”

Referring back to the Beast's latest video, he yells, "I RENTED A $1 MILLION-A-NIGHT HOTEL ROOM!"  No long introduction, no spiel— just the most straightforward explanation of the video's premise.

Image: Mr. Beast / MarketingBrew

How MrBeast builds amazing social hooks

The Metaverse Gets a Funding Reality Check 

Things have taken a turn for the metaverse. Research company Crunchbase reported today that funding to companies in the VR, AR and virtual worlds categories has been declining quarter over quarter since its peak late last year. 

📉 How Bad? 

How bad is it? Despite reaching over $2 billion in the fourth quarter of 2021, metaverse-related funding has fallen to around $760 million in the most recent quarter. The third quarter was also lower than Q1 and Q2 of this year, and the company is expecting Q4 funding to plummet to just $200 million.

On an annual basis, it appears that 2022 will also come in well below 2021 in terms of metaverse- and VR-related venture funding.

💰 Big Deals Still Getting Done

Still, investors aren't abandoning the category, and some big deals are still happening. The startup research company said at least seven metaverse- and augmented reality-related rounds of $100 million and up have closed so far this year. 

Crunchbase added it's also seeing several deals across some similar themes, including: 

• Avatars

• Health applications of VR

• Gaming

Finally, on the public markets, investors seem bearish lately on companies most closely linked to metaverse content and 3D content. It’s not just Meta.

VR/AR Funding Falls As Metaverse Mass Adoption Still Not Reality

TikTok Comes for Spotify 

TikTok owner ByteDance is reportedly getting ready to launch its music streaming service TikTok Music, rivalling Spotify and YouTube Music.

Along with recent discoveries of TikTok Music trademarks in global markets, TechCrunch recently found references to a "TikTok Music" service in the Resso streaming app, which is owned by ByteDance. TechCrunch suggests these references could hint that the China-based company might sync user activity between the two apps. 

Whether TikTok will test its music service globally under the Resso moniker, or launch a separate app, is unclear.

🔮 More Signs 

The company has also launched a site, “music.tiktok.com,” for certain regions. Clicking the download button on the site, however, displays a popup that says "We're working hard to bring you the desktop version. Check back soon.”

Meanwhile, the mobile version suggests that the download button will take users to the Apple App Store or the Google Play Store.

Finally, there are a few more signs that point toward the launch, including:

• The site's terms of service were found — which uses the brand "TikTok Music"

• The company has also created verified "TikTok Music" branded social media handles on Twitter and Instagram.

ByteDance's music app Resso offers hints about TikTok Music's launch

Google Bug: Website Conversions 

And finally, Google this morning reported it had found a bug in its ads platform — specifically, a drop in website conversions reported. So if you’re noticing your sales numbers down, that may be the actual issue. At our deadline time, Google said they had identified the issue and are currently back-filling all delayed conversion data.