Elon Musk's Twitter to Allow More Political Ads on Platform

Twitter Inc. has announced that it will be broadening the scope of political advertising it allows on its social media platform, reversing its decision to ban most political ads in 2019. This policy change is the latest move by the company's new owner, Elon Musk.

On Tuesday, the company announced that it is loosening its policy for cause-based ads in the United States. These types of ads are meant to motivate people to take action, learn, and spread awareness about civic engagement, economic growth, environmental protection, and social equity.

The company recently announced that it will be changing its advertising policy to match that of TV and other media outlets. They did not provide any further details, but said they would share more information as the process moves forward. When asked for comment, Twitter did not respond.

In November 2019, Twitter made the decision to prohibit political ads, which was the opposite of what their social-media competitor Facebook had done. Jack Dorsey, who was the CEO of Twitter at the time, commented on the decision by saying, “We believe political messages should be earned, not purchased.”

When the policy was implemented, certain exceptions were made to permit ads related to voter registration and other political topics. Political ads only accounted for a small percentage of Twitter's total advertising income at the time.

Since Elon Musk's $44 billion acquisition of Twitter in October, the topic of advertising has been a highly debated one. In 2021, the company earned $5.1 billion, with a majority of that revenue, 89%, coming from ads.

In response to the takeover, some businesses chose to halt their advertising expenditures on the platform due to the uncertainty surrounding how Elon Musk would manage the company.

In an effort to allay the worries of advertisers, Mr. Musk sent out a tweet saying, "Twitter should not be a place where anything can be said without any repercussions!" He also started to have conversations with leading advertising executives and proposed to meet with customers in person.

On December 18th, a study conducted by Pathmatics revealed that 70% of the top 100 advertisers on Twitter prior to the takeover had stopped spending on the platform.

Reid Vineis, Vice President at the political-ad agency Majority Strategies, which serves Republicans, commented on Twitter's decision today, noting that it is a victory for free speech. However, he noted that it is yet to be seen how this will affect the company's financial performance. Vineis went on to say that Twitter will need to demonstrate that a digital town square is an effective way to influence voters and policy makers.

Nathaniel Kronisch, the Chief Executive Officer of Buying Time Digital, a company that purchases advertisements for Democrats, expressed his opinion that they are open to any method of communication with voters and are currently taking a wait-and-see approach.

In an effort to attract advertisers, Mr. Musk has been attempting to broaden Twitter's income sources by doing something that few, if any, social media companies have been able to do on a large scale: create a successful subscription service that generates considerable revenue.

Twitter has recently made the blue check mark, which was previously only available to verified accounts, available to all users for a fee. The cost of the service is $8 for those who sign up on a web browser and $11 for those who sign up on an Apple Inc. mobile device. It is unclear how many Twitter users have taken advantage of this offer.

Prior to Mr. Musk's involvement in the first half of 2022, Twitter reported a total of $195 million in subscription and other non-advertising revenue. During the same time frame, the company reported approximately $2.2 billion in advertising sales.