Brandon Doerrer
Nov 15, 2022

Omnicom joins IPG in recommending clients pause Twitter spend

Ad giant Omnicom Media Group is advising its clients, which include PepsiCo, Mercedes-Benz and McDonald's, to halt investments on Twitter in light of recent layoffs and brand safety concerns.

Omnicom joins IPG in recommending clients pause Twitter spend

Omnicom Media Group (OMG) is advising its clients to pause Twitter advertising spend, according to an internal memo first reported by The Verge, joining IPG Mediabrands as the latest big ad buyer to pull back from the platform. 

The memo recommends that clients pause spending on the platform in the short term as a result of mass layoffs on Twitter’s trust and safety teams and resignations from top executives. 

The advice comes days after rampant brand impersonations flooded the platform as a result of users being able to purchase verification badges for $8 through Twitter Blue.

OMG’s memo is the latest shoe to drop since Elon Musk acquired Twitter for $44 billion in late October. Last week Twitter laid off half of its full-time employees before abruptly asking some to come back. On Sunday the platform laid off thousands of contract employees.

The memo cites “risk to our clients’ brand safety has risen sharply to a level most would find unacceptable” as a key justification for pausing spend. It also reveals that Omnicom requested a confirmation from Twitter that recent events won’t affect “compliant processes, operations, products, brand safety and client investment on the platform in any way,” but has not yet received it.

Impersonations can cause serious damage to a brands’ image. On Nov. 10, a fake account pretending to be insulin maker Eli Lilly and Company wrote “we are excited to announce insulin is free now.” After that tweet, Google analytics showed that the pharma company’s stock sank from $368 per share to $346 per share — erasing billions in its market cap.

Omnicom is one of the world’s biggest ad spenders with clients including PepsiCo, Mercedez-Benz and McDonald's.

The holding company didn’t respond to a request for comment in time for publication.

On Nov. 1, fellow ad giant Interpublic Group recommended that its own clients, including Nintendo and CVS Pharmacy, pause advertising spend on Twitter until the platform provides clarity on its trust and safety policies.

Unlike previous brand safety scandals, advertising pullback on Twitter isn’t a huge deal for agencies. The platform’s ad business is relatively small at less than 5% of Meta and Google’s. Twitter advertisers have been steadily fading over the past six months — from 3,900 in May to 2,300 in August and 2,900 in September, according to a MediaRadar sample of Twitter advertisers. Twitter’s ad revenue growth slowed to 2% in Q2 from 23% the prior quarter.

In a July interview with Campaign U.S., Martin Sorrell, founder of S4 Capital, said that Twitter “gets a disproportionate share of voice because of its nature, its PR value, and the fact that the President used to use it.”

One of the largest recent Twitter advertising campaigns comes from SpaceX, a spacecraft engineering company owned by Musk, CNBC reported. The ad promoting its satellite internet service called Starlink will run as a Twitter “takeover” in Spain and Australia. Worth around $250,000, takeovers put a brand’s ad at the top of Twitter’s timeline for an entire day.

In October, Musk requested that the Pentagon assist in funding SpaceX’s Ukrainian operations. The business has a history of receiving millions of dollars in government support, and was denied almost $900 million in subsidies in August.

Source:
Campaign US

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