As you’ll seemingly recall, in late 2023, Elon Musk advised advertisers to “go fuck your self” and “don’t promote” in response to a query about advertisers feeling uncomfortable putting their manufacturers subsequent to the sort of content material that Musk was selling by way of the ExTwitter algorithm. However the full context of the quote is attention-grabbing looking back:
“If anyone’s gonna attempt to blackmail me with promoting? Blackmail me with cash? Go f—your self.” He added, “Don’t promote.”
Blackmail you with promoting, you say?
As a result of it certain seems to be just like the blackmailing is now taking place in the wrong way. There had been some earlier experiences hinting at this, however the Wall Avenue Journal has a giant expose on how Linda Yaccarino and Elon Musk are telling advertisers in the event that they don’t begin throwing cash at ExTwitter advertisements once more, they’ll be added to the fully baseless lawsuit the corporate filed towards advertisers.
The extortionate message is obvious: purchase our advertisements or we’ll value you much more cash in authorized charges:
Late final 12 months, Verizon Communications obtained an uncommon message from a media firm that needed its enterprise: Spend your advert {dollars} with us or we’ll see you in courtroom.
The risk got here from X, the social-media platform that has been struggling to resuscitate its advert enterprise after many company advertisers fled over considerations about loosened content-moderation requirements following Elon Musk’s $44 billion buy in late 2022.
It labored. Verizon, which hadn’t marketed on X since 2022, pledged to spend at the least $10 million this 12 months on the platform, an individual accustomed to the matter stated.
Vogue firm Ralph Lauren additionally agreed to renew shopping for advertisements on X after receiving a lawsuit risk, folks accustomed to the matter stated. All advised, at the least six corporations that had both acquired lawsuit threats or had been motivated partially by stress ways have struck advert offers with X, in response to folks accustomed to the negotiations. The agreements embody each agency ad-spending commitments and nonbinding targets.
In Elon’s world, the shakedown works in a single route solely.
The article suggests this extortion racket could also be “working,” with advert income reportedly ticking up for the primary time below Musk’s tenure.
However “working” is relative when you think about what Musk promised traders: In his unique pitch to traders, Musk promised $12 billion in promoting income by 2028, plus one other $10 billion from subscriptions. As an alternative, he’s decreased to threatening corporations with lawsuits to squeeze out marginal advert spending will increase. It’s the enterprise equal of a safety racket—and about as removed from his unique imaginative and prescient as you will get.
Notably unnoticed of the WSJ article is the truth that at the least a number of the advertisers appeared to return to the platform attributable to a special—however equally silly—purpose: post-election sucking as much as the Trump regime. There have been a number of experiences simply after the election and early within the new administration, that advertisers had been returning to the platform.
However, notably, in none of those tales is anybody returning to promote on ExTwitter as a result of they’re getting any explicit worth from these advertisements. Certainly, advert execs have made it clear how unappealing it’s, since doing so might present detrimental worth, as it doesn’t matter what they do it engages them in a tradition struggle they’d relatively not have something to do with.
The WSJ report notes how the record of defendants in Musk’s lawsuit towards advertisers appears to maintain altering, most probably primarily based on what sorts of offers are made:
Amazon, which had pulled a lot of its spending from X in late 2023, started spending extra on advertisements earlier this 12 months after months of negotiations that concerned Amazon Chief Govt Andy Jassy.
Final November, whereas discussions had been below approach, X added Amazon’s Twitch Interactive to the lawsuit, in response to folks accustomed to the matter. X notified the courtroom final month that it dismissed its claims towards Twitch.
What the WSJ piece doesn’t absolutely seize is simply how essentially unsustainable this enterprise mannequin is. This isn’t a tech visionary disrupting promoting—it’s a failed CEO resorting to authorized intimidation as a result of he can’t ship precise worth to advertisers.
Give it some thought: Musk spent $44 billion promising to revolutionize social media, then drove away the very advertisers who had been purported to fund his grand imaginative and prescient. Now he’s decreased to what quantities to a safety racket, threatening lawsuits to extract advert {dollars} from corporations that may relatively spend their cash actually anyplace else.
These fear-based promoting commitments are inherently fragile. Corporations pressured into spending on ExTwitter aren’t getting significant returns on their advert investments—they’re simply paying to keep away from authorized hassles. The second Musk’s leverage weakens, whether or not via the lawsuit’s decision, his political affect waning, or just advertiser fatigue with being extorted, these offers will evaporate.
You possibly can threaten all of the lawsuits you need, however you’ll be able to’t litigate your method to a sustainable enterprise mannequin. Advertisers who return primarily based on intimidation relatively than outcomes are simply ready for the primary alternative to go away once more. And also you undoubtedly can’t sue your approach again to the $12 billion in annual advert income you promised traders.
The actual story right here isn’t about promoting technique—it’s in regards to the spectacular failure of ego-driven dealmaking that’s created a enterprise mannequin depending on worry relatively than worth. That’s not innovation—that’s desperation masquerading as technique.
Filed Underneath: promoting, elon musk, linda yaccarino, litigation, threats
Corporations: amazon, twitter, verizon, x
