Elon Musk is quite bold with his latest threat to advertisers.
Twitter or X recently announced that brands must spend more on ads to retain the gold checkmark identifying that the account really belongs to a verified brand.
Elon Musk and advertisers previously butted heads over Twitter's content moderation after his takeover, though many of them returned when Linda Yaccarino became Twitter's new CEO.
Pay Up Or Else
Twitter or X is engaging with brands in a way that might scare them away again. According to a report from the Wall Street Journal, the newly rebranded company is demanding that brands pay $1,000 per month or $6,000 in the previous six months in ads to avoid losing their gold verification status.
Twitter/X owner Elon Musk confirmed the news in his latest post, saying that brands could either pay as previously mentioned or pay $1000 per month for a "verified organization subscription" with the ability to convey that organizational authority to affiliates. This move more than pays for itself in organic reach, allegedly.
Musk added that brands have to pay $1,000 per month to set a "moderately high bar" to be a verified organization. This expensive payment would then become a deterrent against scammers creating millions of accounts and prevent organizations of a trivial size to qualify for such a verification status.
Despite Musk's statement, there could be a different reason why Twitter/X wants brands to pay more for ads. Musk previously said that the company had negative cash flow earlier in July due to an approximate drop of 50% in advertising revenue and heavy debt, per The Verge.
This statement, along with the fact that advertisers fled Twitter in late 2022, could mean that Twitter is in need of more (advertiser?) revenue and is forcing brands to spend more or risk losing their gold-verified status.
According to Mashable, Musk's latest ultimatum is similar to the way Musk overhauled Twitter's blue badge verification system. You may remember that he first offered users a "verified" badge for $8 a month, but soon told people and companies that Twitter is removing legacy blue badges for anyone who didn't pay.
Twitter vs. Advertisers
Whether advertisers will pay more for ads to not lose their gold-verified status is still debatable. However, Musk's threat could be a blow to Yaccarino's efforts to attract advertisers back into the website and have them advertise on Twitter/X again.
Yaccarino's naming as Twitter's CEO was seen as one of Musk's smart moves for a good reason. The former NBCUniversal chair of advertising managed to establish and expand a partnership with Elon Musk's Twitter during her time in her former company.
This partnership is evidenced in the coverage of the 2024 Olympic Games in which Twitter will host video from the event.
Unfortunately, Musk's recent decisions with Twitter, such as limiting users' read rate limits, have been undermining Yaccarino's efforts as Twitter's CEO to attract advertisers back to the platform again - the very thing she was reportedly hired to do.
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