GM's pause on paid Twitter ads considered 'strategic move'

Just hours after billionaire Elon Musk completed the purchase of social media giant Twitter on Friday, General Motors applied the brakes to its advertising presence on the site, despite potentially reaching hundreds of millions of active users on Twitter each month.

On Monday and Tuesday, GM's position remained the same: It continues to hit pause on paid advertising on Twitter while it evaluates the social media platform's new direction under Musk, a spokesman said. Likewise, Ford Motor Co. is not currently advertising on Twitter and will continue to watch Twitter's direction under new ownership.

"We do not currently have any ads running on Twitter," Ford spokesman Said Deep told the Free Press on Tuesday. "We will continue to evaluate the direction of the platform under the new ownership. Meanwhile, we continue to engage with our consumers on the platform."

A spokesperson for Stellantis said the company did not have a comment.

Marketing experts said GM's move likely was calculated and strategic. After all, Musk first started pursuing the acquisition of Twitter in mid-April, so Friday's news is hardly a surprise. Then there is GM's push into electric vehicles, which will soon make the automaker a rival to Musk-led electric vehicle maker Tesla. Most companies don't want to put money in their competitor's pockets.

Also, there are the unknowns of a Musk-led Twitter and changes he might make. Since Friday, he has already fired the board of directors and is considering asking users to pay for verification, according to a PBS report. Musk promised to cut back some of Twitter's content restrictions to promote free speech, too, but he said there would be no major decisions on content or reinstating of banned accounts until a “content moderation council” with diverse viewpoints is established.

This means GM needs to study whether its ad dollars will deliver a return on investment there or are better spent somewhere else, experts said. In short, GM's pause on paying to advertise on Twitter might turn permanent.

"Elon Musk is known as a person that everything he touches, he revolutionizes. So him buying Twitter is an unknown and in the long term there will be changes for sure in the direction of this platform," said Ayalla Ruvio, a business and marketing professor at Michigan State University. "This is a strategic move. GM is saying, ‘What does it mean for us in the space as we bring out EV cars?' It doesn’t mean that GM will not be on Twitter, it just means they won’t advertise on Twitter and that’s a big, big difference.”

Problems with a free bird

In its statement Friday, GM spokesman David Barnas said the automaker is engaging with Twitter, "to understand the direction of the platform under their new ownership. As is normal course of business with a significant change in a media platform, we have temporarily paused our paid advertising. Our customer care interactions on Twitter will continue."

GM, like all automakers, does not disclose the details of its ad budget. So it is hard to quantify the impact of GM's current move, marketing experts said.

"(The spend) might not be significant at all, but the optics of it looks retaliatory," said Marcus Collins, marketing professor at the University of Michigan. “They’re saying, 'Its new ownership has voiced a philosophical difference from status quo, so we’re going to take a pause to see where this is going.' That’s a responsible thing to do whether it's Elon Musk or Marcus Collins.”

Collins said it is probable GM could permanently keep its paid advertising off of Twitter.

“If there’s more value using those resources on TikTok or another platform, as opposed to Twitter,” Collins said. “I say that calculus happens regardless of who owns the platform. That’s a calculus they should have been doing before Elon Musk owned the company.”

Of course, the Musk presence cannot be discounted. GM CEO Mary Barra is typically artful at dodging questions about Tesla and Musk as a competitor, but she did throw some shade on him last year. Reporters asked her to comment on Musk suggesting that President Joe Biden's spending bill be "deleted." The bill, which included up to a $12,500 tax credit for EVs and subsidies for EV charging stations, favors union automakers, rather than Tesla.

"I’m not going to get into a match on that type of stuff because I actually mean what I say and say what I mean," Barra said at the time. "When I say something, I really mean it and I’m an engineer, so I am going to execute it.”

Cost-benefit analysis

So just what does Musk mean when he says certain things? The question is something marketing experts ponder when considering Musk tweeting "The Bird Is Freed" last week after buying Twitter in a $44 billion deal.

"He was referring to it being a much more open platform for people to express their opinions," Ruvio said. But she added that she inferred Musk's comment to also assure that it "will not be the Wild West" where people can say whatever they want without consequences.

But Collins said he got the sense that people took that to mean, "you can do whatever you want and say what you want to say." The proof, Collins said, is that in the 12 hours after Musk acquired Twitter, use of the N-word on the site surged 500%, according to The Washington Post.

"I could see GM and others saying, 'I don’t want to be in this place,' " Collins said. "This all boils down to a cost-benefit analysis, is the juice worth the squeeze?”

Twitter's tech audience

Wayne State University business professor Marick Masters has studied social media platforms for a future book. He said he wouldn’t be surprised if a new social medium pops up to replace Twitter one day, started by someone else.

"It’s a fluid situation and it’s uncertain," Masters said of the social media landscape.

GM will have to decide which audience it wants to reach across all advertising: traditional, as well as social media sites. Twitter’s monthly active user numbers have been about 345 million for much of this year, according to Adobe.com, but there are bigger sites. With nearly 3 billion monthly users, Facebook is the largest social media platform in the world. But Instagram tops Twitter by surpassing 1 billion monthly users.

Still, 63% of Twitter users are ages 35 to 65, with men making up nearly two-thirds, Adobe.com said. In the U.S., which is GM's largest market, there are 81 million Twitter users, roughly a quarter of the country’s population, according to Adobe.com.

About 40% of Twitter users are on the site multiple times a day and Twitter's popularity is highest with tech-savvy users, a benefit for GM as it rolls out new technology on some 30 new EVs it will bring to market over the next three years.

For those reasons, it may make sense for GM to resume paying to advertise on it again.

“See what the platform will look like and if it looks like it’ll be a reasonable platform with a good audience … then they should make the decision to reinstate their advertising and go forward from there," Masters said. "I don’t think the fact that a competitor owns it should be a disqualifier or a concern. You go where the audience is … go where the options are to reach the audience."

GM is no threat

It also remains free for GM to tweet about its products, a promotion that will reach GM's 800,000 followers on @GM.

"Musk can’t tell them not to do that, and they will gladly do it," Ruvio said. "Being on a competitor's website and promoting your product is super smart and savvy."

And Musk is likely going to be OK with GM and others tweeting their wares, Ruvio said.

"GM is not a threat to him," Ruvio said. "If he does not let them do that, he’s admitting he’s afraid. It challenges his credibility. He won’t risk that and frankly, I don’t think he’s afraid. His brand (Tesla) is so well-established and considered a market leader that him allowing GM to continue tweeting is miniscule. It may be different in the future."

As for how Twitter might change, Ruvio said to expect more technological advances moreso than rules about who can post and who cannot.

“For the average consumer, they won’t even make the connection between Tesla, Twitter and GM not paying for advertisements," Ruvio said, warning automakers, "If you start eliminating things, you really limit your reach to consumers and you can’t afford to do that. It’s time to consider being more liberal to the thought of your competitors.”

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Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.