November 27, 2022

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L’Oréal suspends ad spending on Twitter

4 min read

L’Oréal suspends ad spending on Twitter as leading brands and marketing groups grow increasingly nervous about inappropriate content being circulated on the Elon Musk-owned platform.

The decision of the world’s largest cosmetics maker comes just days after Musk completed his $44 billion takeover of the social media group, according to two people with knowledge of the situation.

L’Oréal declined to comment. In a statement sent to Reuters after the release, a company spokesman said it had “not made a decision to suspend advertising on the platform.” Twitter did not immediately respond to requests for comment.*

While Musk has tried to reassure marketers that Twitter won’t become a “hellscape for everyone,” executives from some of the world’s biggest advertisers said several clients privately verify — and in some cases limit — their presence, even when they do would be reluctant to make their concerns public.

“There are some silent layoffs,” said one ad executive.

Twitter made a renewed push this week to reassure advertisers, who make up the bulk of the company’s $5 billion annual revenue.

In an email to a media outlet, seen by the Financial Times, the social media group urged brands to “stay with us as we move through this transition,” adding that they are changing their moderation policy didn’t change and tried to be “warm and friendly welcome to all”.

In a call Wednesday to Top Adspend on Twitter, Musk told brands he plans to offer different levels of content moderation, similar to a movie rating system, according to three people familiar with the conversation. He also assured callers that he has no plans to eliminate the content moderation role at the company, one of the people said.

However, Musk appeared to publicly dismiss marketers’ concerns on Wednesday, tweet a poll ask whether advertisers should support free speech or political “correctness”.

L’Oréal is one of the world’s top 10 advertisers and spent more than 10 billion euros advertising its cosmetics, perfumes and shampoos last year alone. It allocates only a small portion of its marketing budget to Twitter and spends more money on TikTok and Instagram, which are more focused on image building and brand influencers.

The beauty company’s decision is a sign of widespread unease among advertisers over Twitter and follows a similar decision by General Motors last week.

The largest US automaker said it has “temporarily paused” paid advertising on the service, “as is the normal course of business with a significant media platform change.”

Interpublic, one of the world’s largest advertising groups, has also advised its clients to stop spending on Twitter for the next week.

The US conglomerate behind McCann and MullenLowe told clients to wait until there is “more clarity” about Twitter’s plans and until the platform has the necessary “organizational capability” to ensure “trust and security” according to the advice first reported by Morning Brew.

Musk has previously said he wants to relax content restrictions and reverse permanent user bans, raising concerns among some advertisers that toxicity and abuse could increase. With the US midterm elections next week, there are additional concerns about the spread of misinformation and violent content online.

Since the world’s richest person took over, Twitter’s approach to “brand safety” — an industry term that refers to the risk of ads appearing alongside problematic content and misinformation — has remained unchanged.

Forty civil society groups signed an open letter Tuesday to Twitter’s top marketing clients, including Amazon, Coca-Cola and Procter & Gamble, urging them to stop all advertising if the new owner undermines community standards. The groups said they were concerned Twitter’s content moderation initiatives were being “eviscerated”.

Several advertising industry executives said Musk ultimately needs the industry’s financial backing to realize his ambitions for Twitter, so he must take her concerns about problematic content seriously.

Musk has promised to set up a “Content Moderation Council” at Twitter with “very diverse viewpoints” and said that users who have been blocked will not be allowed back until the company has “a clear process in place for doing so”.

At the same time, the company has suffered a surge in hateful rhetoric since Musk took the helm, which it attributes to a coordinated campaign of largely fake accounts. Musk himself posted and later deleted an article that contained a baseless conspiracy theory about the attack on Nancy Pelosis’ husband.

Other advertising executives and brands are concerned about Musk’s plans for widespread layoffs at Twitter and whether they will hit brand safety and ad sales teams. Some of them were unsettled by Tuesday’s resignation of Sarah Personette, Twitter’s chief commercial officer, who had been their main point of contact at the company.

*This article has been amended to include a statement by L’Oréal provided to Reuters

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