Elon Musk, the owner of Tesla and SpaceX, has completed his deal to purchase Twitter for $44 billion. Over the next months and years, we will see what changes the new ownership has in store for one of the most popular social media platforms.
Twitter has over 300 million daily users, and one perspective on Musk’s purchase is that he believes he can significantly raise that amount through changes to the platform.
As an expert who manages brands on social media for clients and TML Communications, the early days of leadership show why it is best to be both cautious and optimistic over Twitter’s future.
With change, comes opportunity for growth
Musk and his team have promised changes to the way Twitter works. A verification checkmark available to individuals and brands is one of many changes to come. In addition, Twitter management has publicly discussed adding options for payment, posting longer videos, and even options to make money through the sale of specific video content.
Twitter could compete with YouTube by allowing the posting of longer videos and eliminating some of the steps necessary to get content to the followers of a brand. By allowing the videos to be posted directly on Twitter, that would drive more traffic to the site and potentially result in more time spent per user on a daily, weekly, and monthly basis.
As of today, someone seeking compensation for their content or from their fanbase on Twitter, can post information about their Venmo, Cash app, or Bitcoin address. But the ability to make a payment to another Twitter user currently relies on a third-party platform such as Cash App (Cash App is operated by Block, a company founded by Twitter co-founder Jack Dorsey).
Getting directly involved in the payment space would be good for consumers, due to increased competition which can lead to better products and services for everyone. In addition, from Twitter’s point of view, there are additional opportunities to earn revenue from transaction and processing fees. For example, Cash App charges $1.50 per $100 if you want an instant transfer to your bank account. If you are willing to wait a few days, there is no transaction fee for the same transfer.
These are just a few examples that could lead Twitter down a path that results in more users, higher revenue, and maybe a better product.
But that is not the end of the story.
Changes in the short-term could lead to problems for brands
Recently, Twitter gave everyone the option to purchase a blue checkmark as part of its verification service for $8 a month. Previously, the blue checkmark was only issued at Twitter’s discretion to companies, individuals, and government officials to show they are who they say they are.
Immediately after the changes were made, accounts were created by some users representing large brands such as Eli Lily & Company, and other prominent organizations. A Tweet from the fake Eli Lily account told tens of thousands of users that a particular medication would be offered for free from now on.
The real Eli Lily account made no announcement concerning a free product or price change, but many people were shown misinformation. This may have been a factor in a price dip in the company’s stock price that day, resulting in millions of dollars in lost market value.
This is a simple example that shows that for the time being, brands need to tread carefully when planning marketing or advertising efforts on Twitter’s platform. In addition, changes to content moderation and previously banned accounts being reinstated present a real risk that an advertising message may appear next to something unsavory that could hurt the value of any brand.
For now, I still believe in Twitter. I think that individuals should use their voice, especially given the potential to reach millions of users.
Leaders of many countries, including President Joe Biden, use Twitter to communicate important messages. For the time being, we will do the same.
But, as always, it’s vitally important to know the risks.
Teresa M. Lundy is the principal and founder of TML Communications, the award-winning strategic public relations, crisis communications, and community engagement firm that produces results. Follow Teresa on Twitter @TeresaMLundy.