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Twitter’s decision to ban all political ads is a PR win, but it will have almost no effect on the company’s advertising business

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Twitter’s decision to ban all political ads is a PR win, but it will have almost no effect on the company’s advertising business

Category : entrepreneur

  • Twitter CEO Jack Dorsey announced in a tweet thread today that his company would stop running paid political ads.
  • The decision contrasted sharply with Facebook’s Mark Zuckerberg positioning, but the real-world impact on Twitter’s ad business will be negligible.
  • EMarketer estimates that Twitter will bring in $1.57 billion in ad revenue in 2019, total political ad spend for the 2018 midterms was less than $3 million, according to CFO Ned Segal.
  • Experts also told Business Insider that the platform is more valuable for gaining influence among media elites and those with organic reach, calling Dorsey’s decision a shrewd PR play.
  • Still, the move prompted President Trump’s campaign to state incorrectly that the company had thrown away “hundreds of millions” in potential ad revenue.
  • Click here for more BI Prime stories.

Twitter CEO Jack Dorsey scored an easy PR victory today by announcing that his platform would no longer run paid political ads.

Dorsey tweeted the announcement to counter Facebook CEO Mark Zuckerberg’s arguments for running political ads — including those that feature lies from elected officials.

Twitter would not elaborate on Dorsey’s tweets.

Experts agreed that the decision would have a negligible effect on Twitter’s business.

EMarketer estimated that the platform would bring in about $1.57 billion in total ad revenue in 2019. But Twitter CFO Ned Segal wrote that his company took in less than $3 million in sponsored political tweets during the 2018 midterms.

—Ned Segal (@nedsegal) October 30, 2019

 

Several presidential candidates including Joe Biden and Andrew Yang quickly jumped in to applaud Dorsey’s decision.

Donald Trump campaign manager Brad Parscale, meanwhile, accused the company of walking away from “hundreds of millions” in revenue.

—Brad Parscale (@parscale) October 30, 2019

 

Dorsey’s announcement came as Zuckerberg defended his decision to keep running political ads

“[Dorsey] clearly is doing it because he thinks it’s a smart PR play. It’s a smart place to be, given the backlash Facebook has received on its decision regarding political ads,” said Rob Shepardson, a political consultant and founding partner of ad agency SS+K who worked on both Barack Obama’s presidential campaigns.

He added that the “shrewd” move arrived during Facebook’s earnings call, during which Zuckerberg tried to play down the controversy surrounding political ads.

“In a democracy, I don’t think its right for private companies to sensor politicians or the news,” Zuckerberg said on the call, noting that paid political content would amount to a sliver of Facebook’s revenue next year.

Shepardson said the risks for Twitter are minimal as Twitter’s value for political advertisers lies in reaching elite audiences and journalists, not buying mass influence. Some of the platform’s most influential personalities, like President Trump, use it in an almost purely organic way.

He also said the lack of paid political ads on Twitter would not impact misinformation, most of which stems from coordinated activity by bad actors or groups of automated accounts.

Details of Twitter’s policy remain murky. For example, Dorsey did not say how the platform will define “issue ads” that it plans to ban alongside campaign ads.

When asked for more information, a Twitter spokesperson linked back to the CEO’s tweet stating that the policy will be shared on November 15 and go into effect on November 22.

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About Author

Sammy Singh

Global VC, Founder, and entrepreneur extraordinaire as featured in Inc. Magazine, Bloomberg, and Forbes. Sammy Singh is a graduate of UCLA and Wharton School of Business as well as a former student of Loyola University of Chicago. Sammy is best known as a renowned financial technology global entrepreneur and has founded over 26 different firms across industry and all over the world. He is a venture capitalist,a TV/ Film actor, tax specialist, and marketing solutions strategist. Connect with Sammy Singh on social media below! www.linkedin.com/in/cfo www.instagram.com/champagnegqpapi www.facebook.com/officialsammysingh www.twitter.com/cxosynergy www.medium.com/@sammysingh www.crunchbase.com/sammysingh

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