Musk’s latest Twitter move can only send ad revenue plummeting

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Another day, another sign that Elon Musk appears to be deliberately steering Twitter Inc. into bankruptcy. The unstable billionaire fired a large number of the company’s contractors without warning, according to CNBC, or some 4,400 contractors out of 5,500, the Platformer tech newsletter reported over the weekend. Many of these people were content moderators.

Concerns about content moderation have been at the heart of why many of the site’s advertisers, such as General Motors Co. and Pfizer Inc., have suspended business with Twitter, taking a wait-and-see approach. This latest development gives advertisers another reason to stay away longer, draining Twitter of much-needed capital. Ads contribute about 90% of Twitter’s revenue.

Without a sufficient number of content moderators, there is a greater chance that hate speech, harassment, misinformation, and spam will thrive on the site. This is a bigger problem for Twitter than for sites like Google or Facebook, where ads are based on search results or more specific targeting. On Twitter, advertisers want to create positive brand awareness, and that’s going to get a lot harder.

Social platforms use artificial intelligence systems to flag bullying, child nudity and other toxic content, but they still need humans as a safety net to distinguish, for example, what’s a joke and what’s what is bullying, or what is art and what is obscene. Often faced with the mental trauma of regularly seeing the worst possible images and epithets the internet has to offer, these people are the unsung heroes of social media.

Generally speaking, AI systems are unreliable for moderating social media posts, according to a 2020 report by the Translatlantic Working Group, a project of the Annenberg Public Policy Center at the University of Pennsylvania. Facebook’s own AI is estimated to remove just 2% of viewed content that violates hate speech rules, according to an internal memo published by The Wall Street Journal last year. Facebook said the prevalence of this content is decreasing. Its parent company Meta Platforms Inc. employs about 15,000 people as content moderators.

The dismissal of the contractors will not be covered by Musk’s plans to establish a “content moderators council”, which will deal with high-profile issues such as whether to allow Donald Trump back on the platform. . Much more content on Twitter will now be left to the machines, potentially undoing the platform’s good work of weeding out misinformation and fake foreign accounts over the past two years.

This is sure to further damage Twitter’s reputation in the eyes of advertisers, who have been warned that Twitter is now a “high risk” platform. GroupM, a major media agency that buys advertising on behalf of brands like Nestlé SA and Ford Motor Co., released a “risk reassessment” of Twitter dated Nov. 11, citing Twitter’s “increasing toxicity” and the turmoil of executive resignations, according to a document reviewed by Bloomberg Opinion. The document was also reported by media news site Digiday.

GroupM’s document says that to address its concerns, Twitter must demonstrate its “commitment to effective content moderation” and reduce incidents of toxic content and hate speech. But Musk did the opposite.

Just as Twitter needed streamlining, Musk overdid it in his brutal gutting of the company’s infrastructure, as if tearing down the foundations of a house in need of redecoration and risking it to collapse. ‘collapse.

The world’s richest man is desperate to recoup his $44 billion Twitter purchase. But advertisers scoff at the company’s effectiveness with Musk. They just don’t want their ads to be next to spam and hate speech. It’s hard to see ad dollars returning to Twitter anytime soon, no matter how hard Musk might try to prop things up with his other companies. This will make it more difficult to keep Twitter solvent in the long term.

More from Bloomberg Opinion:

• Twitter is destroying the musky aura that Tesla needs: Liam Denning

• We may be watching Twitter implode in real time: Parmy Olson

• Musk’s massive firing is another sign of Twitter chaos: Mark Gongloff

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Parmy Olson is a Bloomberg Opinion columnist covering technology. A former journalist for the Wall Street Journal and Forbes, she is the author of “We Are Anonymous”.

More stories like this are available at bloomberg.com/opinion

Sallie R. Loera