Elon Musk is threatening to 'thermonuclear name and shame' advertisers that press pause on Twitter. It's a dumb thing to do to your biggest customers.

Musk wrote an open letter to advertisers before taking control of the company.

He went on a listening tour on Madison Avenue to assure advertisers that brand safety would be a priority.

After some advertisers stopped spending on the platform, some advertising firms advised their clients to do the same.

Musk went on the offensive after advertisers paused spending, saying that they were causing a massive drop in revenue. Free speech is being destroyed in America.

At least one executive who participated in Musk's listening tour was blocked by him.

—Lou Paskalis 🇺🇸 (@LouPas) November 4, 2022

Musk warned advertisers that they would be named and shamed if they didn't spend more on the social networking site.

—Elon Musk (@elonmusk) November 4, 2022

It is dumb for Musk to explicitly threaten advertisers. We should get into them.

Advertising is Twitter's most significant source of revenue by far

Last year it made $5 billion in revenue. Advertising was the majority of the money. Selling ads is the core business of the micro-blogging site.

The advertising climate is not easy to navigate. Advertisers are cutting back. Total advertising spending was down in September.

The decline in advertising revenue was reported by other advertising giants like Meta and YouTube.

Advertisers were leaving before Musk took over. The number of advertisers on the micro-blogging site went from 3,900 in May to 2,900 in September.

If advertisers stop spending for whatever reason, Musk will retaliate. Terry Kajawa is the CEO of Luma Partners.

—Terence Kawaja (@tkawaja) November 5, 2022

Advertisers don't need Twitter

Musk may or may not know that advertisers don't need a social media platform.

Ad offerings from companies like Meta and Alphabet are hard to duplicate.

Even though Apple's recent changes to mobile tracking have weakened Meta's direct response advertising business, it was still until recently the most dominant in the industry.

Any business that wants its products to stay visible needs to spend money on search engine ads. One of the few places where broadcast TV advertising can be found is on the video sharing site.

In direct response ads, a split of 85% brand advertising to 15% direct response is what Twitter lags behind.

There are a lot of options for advertisers to choose from, including media outlets. Advertisers know they can shift their spending to other places without any issues.

Brand advertising relies on "brand safe" outlets where ads won't appear near objectionable content. During the 50% staff cuts, 15% of the trust and safety team was laid off. Front-line moderation teams were not affected.

—Yoel Roth (@yoyoel) November 4, 2022

The platform is fundamentally unsuited to it, or both, according to Ben Thompson, a tech and media analyst. He said that brand advertisers are more sensitive to where their advertising is placed. "This, by extension, means these companies have more influence on the platform, as Musk seems to be discovering," Thompson wrote.

A long thread posted by the CEO of Digital Content Next pointed out that a lack of transparency around moderation makes brands nervous and cheap direct response makes it hard for the company to compete in the market.