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What does Elon Musk's proposal for an ad-free Twitter mean for brands?

Elon Musk has recently declined a role on the board of Twitter which has allowed him to take ownership of more of the social media platform. He has expressed his thoughts of having an ad-free Twitter. But what does this thought mean for brands and how much can the billionaire influence the structure of the platform?

Twitter CEO Parag Agarwal’s decision to invite Elon Musk to the board has been considered to be an attempt to prevent Musk from buying up more than 15% of Twitter. Now that the billionaire has refused the offer, the question is back on everyone’s mind - to what extent can Musk change Twitter’s pre-existing strategies?

Elon Musk’s initial interest in Twitter came some time around March when he began tweeting that Twitter needs to change for vague free speech related reasons. This is what social media consultant and industry analyst Matt Navarra had to say on the matter: “Twitter has launched a significant number of privacy and safety controls for users in recent years. The platform has also built out more comprehensive content moderation policies to tackle growing concerns about the spread of misinformation and online harassment. Elon says he’s a free speech absolutist. It’s only a matter of time before this clash of ideologies and visions for the platform becomes problematic and boils over.”

What does this mean for Advertising?

Twitter has gone through many changes over the years and advertisers have welcomed the same and held the aim of making the social media platform a brand-safe space. As per latest reports, it is seen that total ad engagements decreased 12% year-on-year, but its cost per engagement increased 39%. The net loss for the full year amounted to $221m. Despite that, ad sales rose 22% overall in the fourth quarter.

Elon Musk has proposed a focus on ad-free subscriptions. In his words: “Price should probably be ~$2/month, but paid 12 months up front & account doesn’t get checkmark for 60 days (watch for credit card chargebacks) & suspended with no refund if used for scam/spam. And no ads. The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive.”

A paid ad-free option for social media platforms has been suggested many times in the past. But what Musk is adding brings on a new set of issues. To offer such an option, it’s likely Twitter would need to invest significant amounts of its resources to reconfigure its tech stack in order to switch off ads and data collection for a limited group of users paying to remove ads from their feeds.

As per the most recent updates, Elon Musk is now hitting the headlines with a $43 billion all-cash offer to buy the microblogging site. Musk is calling this his “best and final” offer, saying the social media company "needs to be transformed as a private company."

In his words: "It's very important for there to be an inclusive arena for free speech. It's just really important that people have both the reality and the perception that they are able to speak freely within the bounds of law.”

Musk also went on to say, “One of the things I believe Twitter should do is open-source the algorithm and make any changes to people's tweets - if they are emphasized or de-emphasized, that action should be made apparent. So anyone can see that action has been taken. So there's no sort of behind-the-scenes manipulation, either algorithmically or manually.”

It is difficult to predict how this whole situation will pan out. What are your thoughts on the matter? Tell us in the comments!

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