[HN Gopher] Musk's advertiser push undermined by his own opening...
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       Musk's advertiser push undermined by his own opening moves
        
       Author : rurp
       Score  : 18 points
       Date   : 2022-11-06 19:25 UTC (3 hours ago)
        
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 (TXT) w3m dump (www.axios.com)
        
       | zackees wrote:
       | All Musk has to do is create an Ad system that delivers positive
       | ROI.
       | 
       | That's it. If he does that then people will sign up because they
       | enjoy scaling up their business. There is so much public backlash
       | against the large advertisers anyway, especially Pfizer, that I
       | think this is ultimately a good thing and establishes better
       | Trust with Twitter and it's users.
        
       | obblekk wrote:
       | Ad revenue risk really breaks out by 2 major types of spending:
       | 
       | 1. Brand Advertisers
       | 
       | These companies don't measure direct ROI from their ads in the
       | short run, but believe that it's important to put their brand and
       | message out continuously to keep consumers engaged. Coke/Pepsi
       | are the classic example. Very few people click on a Coke ad, land
       | on a page, and put in their credit card to purchase a bottle of
       | Coke right away.
       | 
       | These companies care disproportionately about long term
       | perception and therefore who their brand is associated with. They
       | buy big event sponsorships for the same reason.
       | 
       | 2. Direct response advertisers
       | 
       | These companies continuously measure the ROI of ad spend vs.
       | revenue impact, sometimes even on a weekly or monthly cadence.
       | These companies have some limits (e.g. no ads on porn or
       | violence), but generally are much more willing to buy less
       | attractive inventory that has higher ROI.
       | 
       | Classic examples here are Wish (or most ecommerce), SaaS, etc.
       | 
       | Sales meetings and calls with advertisers happen almost only with
       | brand advertisers because it is their business where decisions
       | cannot be made simply by looking at the metrics. This is a lot of
       | spend but, importantly, it's usually inefficient spend from an
       | ROI perspective. If these folks exit the market, the direct
       | response folks will see lower ad auction prices and
       | proportionately increase their spend.
       | 
       | These feedback loops take a few weeks/months to play out, but
       | this means the impact of decreased brand spend is usually much
       | less than appears on day 1.
       | 
       | Twitter is a bit unique in that they probably have one of the
       | worst direct response conversion rates, attribution,
       | optimization, and overall performance. That's really where Elon
       | should invest a significant amount of resources because that
       | problem can be improved a lot with better adtech, rather than
       | salesmanship.
       | 
       | Google is generally the best at this ML based adtech optimization
       | (people searching for products also tend to want to buy that
       | product making their problem a little easier), followed by
       | Facebook, followed by a bunch of 3rd party display platforms,
       | followed by Twitter (in my experience as an ad buyer, but
       | obviously not universal).
       | 
       | If I were Elon, I would:
       | 
       | 1. Create a new ad unit that can only be shown to verified users
       | or adjacent to verified tweets - this should solve most ad fraud
       | and content rule concerns. Ad unit should be launchable within a
       | few weeks (harder technical problem because it requires context
       | of what's adjacent in the feed, but can be hacked with rebates
       | for improper impressions). Spend the next week selling this to
       | brand spenders.
       | 
       | 2. Spend 50% of my twitter energy hiring/empowering adtech
       | experts (this is a playbook that has been done several times
       | over)
       | 
       | 3. Relaunch vine with trending videos on twitter (video ads)
       | 
       | 4. Ignore search - technically hard problem with low 1yr ROI
       | 
       | 5. Start decreasing organic reach for non-verified users in feed
       | + upsell boosted posts -- this is Facebook Pages playbook and is
       | super easy to implement technically (feed value model adjustment)
        
       | [deleted]
        
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       (page generated 2022-11-06 23:02 UTC)