Thousands of the world’s biggest brands are poised to abandon advertising on Twitter as Elon Musk battles to protect the company from bankruptcy.
Omnicom – a global media agency which represents 5,000 clients including McDonald’s, Apple and Pepsi – has told customers to pause their Twitter promotions over fears of a “serious risk to brand safety”.
The decision is a fresh blow for Mr Musk after a chaotic week in which he introduced and then U-turned on a rollout of subscriptions, suffered an exodus of senior staff and told employees that “bankruptcy is not out of the question”.
Mr Musk has been battling an exodus of major advertisers and celebrity users since he bought Twitter at the end of last month in a $44bn (£37bn) deal, with the likes of Volkswagen ditching their spending and Stephen Fry, Whoopi Goldberg and model Gigi Hadid among those to shut their accounts.
Mr Musk – who has already fired thousands of staff – is hoping to improve the fortunes of the business by allowing users to pay $8 for a “blue tick” previously reserved for celebrities, politicians and other figures of public importance whose identity was verified.
But the proposal backfired and was paused last week when it led to a wave of imposter accounts pretending to be businesses and famous people.
Shares in pharmaceutical company Eli Lilly fell more than 2pc wiped off its share price last week after an imposter account tweeted that “insulin is now free”.
Mr Musk has told Twitter employees that “bankruptcy isn’t out of the question” as it struggles against the economic downturn. In an all-staff call on Thursday, he reportedly told workers the company may have a “net negative cash flow of several billion dollars” next year.
Mr Musk has also told the social media site’s staff that they must now spend a minimum of 40 hours a week in the office or be fired.
In an internal memo sent out late last week, Omnicom reportedly told its brands that they should “pause activity on Twitter in the short term”, adding that issues with the company’s roll-out of its new subscription service had “potentially serious implications” for companies advertising on the site, according to American technology news website The Verge.
Omnicom reportedly told clients it had “formally requested that Twitter assure us that these issues will not impact compliant processes, operations, products, brand safety and client investment on the platform in any way”, but had not received a response “seemingly due to the lack of senior leadership now in these areas.”
Mr Musk, the founder of Tesla, has previously estimated the exodus of brand advertisers costs the tech giant £3.4m a day, though he hopes the subscription service will remedy the business’s ailing finances.
Ads have until now accounted for about 90pc of Twitter’s revenue. “We need to pay the bills somehow! Twitter cannot rely entirely on advertisers,” Mr Musk wrote on October 31.
General Motors suspended advertising on October 28, the day after Mr Musk fired Twitter’s entire board of directors and several members of the executive leadership. Other brands deserting the site include General Mills Inc and Gilead Sciences.
Omnicom did not respond to requests for comment. Twitter also did not respond.