Twitter has reported record revenues – but at what cost?

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With Twitter reporting record revenues in Q4 2020 – despite a year of continuous controversies surrounding social media – what does the future hold for platforms such as Twitter and Facebook and how can business leaders and personalities best position themselves on them?

No matter what side of a political, social or ethical debate you associate with, it has become clear over the pandemic that Twitter, Facebook, TikTok and several other of the leading social media platforms are a source of information and a wide range of views – but are also a free service that can be used to spread lies, prejudice and to light a fire for arguments that can spread into riots and violence. Conversely, with Twitter banning Donald Trump – is the line between tech platform and publisher being blurred?

So, as a senior business professional – what should you do? Is social media a necessary evil? Or can more be done to make it more appropriate for all users? To find out, Business Leader spoke to some industry leaders on the future role for social media and about their personal views and experiences of engaging with Twitter and Facebook.

Nick Wright, Chief Fanatic at Fans for Brands, a marketing and communication consultancy

Ideas come in many forms. There are good bad ideas. Bad good ideas. Bad, bad ideas. And the one we all seek, good, good ideas.

To make it harder, ideas morph.

For a long time, Twitter was a good bad idea. In the heady days of the Twitter Spring Revolutions of 2011, the democratisation of free speech seemed wholly positive. In fact, it was such a good idea, no one seemed to care it was also a bad idea as Twitter had no business model (and was proud of it).

Time marched on. The goodness of free speech has been superseded by goonishness of fake speech, of hate speech. That’s bad. Worse than bad, toxic even.

Meanwhile, the original bad idea (i.e., no idea) has seemingly been replaced by an even badder one. Notwithstanding Twitter’s ‘record Q4’, revenue, it only increased 7% year over year in 2020. Meanwhile, costs and expenses raced ahead by 19% to reach $3.69 billion. The 2020 net loss was $1.14 billion, representing a net margin of -31%. In terms of outlook, the best Twitter can promise in their Earnings’ Statement is that costs will increase at a slower rate than revenue growth.

Scott Galloway (better know to some as Prof G) has been on Twitter’s case for a while. He recently published a big take Twitter take down in New York Magazine.  He concluded that “We know it’s terrible for society. But it’s also a terribly run company.”  In other words, Twitter is a bad, bad idea. The article is interesting in outlining some ‘capitalist’ remedies to the business model. That said, he has fewer mitigations for the platform’s ‘toxicity’. And, ultimately, he concludes, that is bad for good business. Frankly, we are at the start of politicisation of platform policing.

The obvious way to make the idea good again is to create closed, safe zones for like – as in hopefully sane – minded folk. Enter beta flavour of the month, Clubhouse. The good idea being the promise of dudes hanging out shooting the breeze in chatrooms. However, Clubhouse is also, if not a bad idea, a no idea. There are rumours of ‘monetisation tools’ in development, but there is no business model yet. Perhaps founders Paul Davison and Rohan Seth don’t really care. After all, they are looking for a Series B valuation of $1bn. Oh, and of course Twitter is creating a copycat Clubhouse called Spaces.

There are, of course, other community platforms. Trump supporters parleyed over to another ‘free speech’ platform Parler. Meanwhile, Reddit has been making headlines, moving markets. Medium is a wonderful source and resource of well, medium form content. Patreon allows communities to form around passion points. There’s even boring old LinkedIn. Perhaps now is the time for them to envision their vision to “Create economic opportunity for every member of the global workforce.”

So, what does this mean for business leaders and their businesses? We are seeing the playing out of what EY calls “the fragmentation of everything.” A world of divergent social contracts, walled gardens, hyperpolarization. This creates a scary and dangerous world for business leaders, brands, and their businesses to navigate. Courting controversy is a minority sport and now, increasingly, even voicing an opinion is controversial. As the now ex KPMG boss Bill Michael will attest.

And yet at the same time, we are increasing our demands on business leaders, brands, and corporations to be ‘purpose driven’, to be exponents of ‘compassionate capitalism’, to do more than virtue signal. Therefore, it is better to be engaged than disengaged. This is about curation not agitation. Producing meaningful content, not mealy-mouthed comment. It is about being reflective, not righteous in real-time. Ultimately, the challenge is concentrating on crafting the message, rather than massaging the medium.

That all said, as soon as Business Leader publish their article, I will, of course, be retweeting it.

Jackie Fast, Managing Partner of Sandbox Studios & Author of Rule Breaker

As a platform, I use Twitter frequently. I appreciate the short bursts of important and noteworthy information it provides my incredibly packed schedule. I predominantly use it to track certain journalists and writers in the fields I work in to ensure I catch their latest articles. It also means I can join in on the conversation when I have an opinion. Which is often.

But as a business, I am a big fan. As many of the social behemoths continue to shy away from being transparent on how their platforms are being used, Twitter chooses to take a stance. They are becoming more responsible, more reliable, and more conscientious. I believe that their record numbers this past quarter are less to do with their new ad format, and more to do with the fact that they are willing to make positive change in a public forum despite potential backlash. More specifically banning former President Trump following the riots in Washington DC. People want to engage with businesses that do not sit on the sidelines. Businesses and leaders who are leading positive change. This is what differentiates Twitter.

I wholeheartedly believe it is the job of social media and big tech to ban harmful (not controversial) use of their platforms. You cannot expect the government to do so – they are too far behind to enact any real change. It is up to the platforms themselves to take the hard look inward and make some decisions about what kind of businesses they want to become.

Social media was set up for the people, but it is not currently working for the people. Suicide rates amongst young people are up dramatically. Even pre-pandemic feelings of loneliness were unprecedented amongst the most digitally savvy. These stats prove that the more we are connected digitally, the more harm we are doing.

In any other industry, we would not stop to question whether there should be more restrictions. We do not allow advertisements to run on television that negatively impact children or lie, and yet we allow this type of content on media that is being much more heavily consumed.

Twitter has taken the brave stance to make a statement and in doing so, I hope, will inspire the other platforms to follow suit before it’s too late.

Matt Gubba, CEO & Founder of BizBritain

I first started using Twitter in 2010 and have used it heavily during the past decade. Over the years it has evolved into a dramatically different animal.

In the early days, it was quite a politically neutral environment, mainly used by businesses wanting to promote themselves, and by bloggers sharing links to their posts. A stark difference to what it is today; a highly polarised, politically charged platform primarily used by warring sides of ideological arguments wanting to have a pop at each other.

Twitter has always worked quite well for me and has helped me significantly in building my personal brand. It still works well today for that purpose; it just requires a slightly different approach. Entrepreneurs and CEOs who are prepared to speak out and voice their opinions on contentious issues have the potential to gain significant social reach. But those not prepared to do that just get drowned out by the noise.

I must admit, I do find the recent trend of social platforms censoring certain viewpoints very disturbing. For me, it erodes the core purpose of social media and diminishes its value. I’m a die-hard believer in free speech, and I’d argue everyone has a right to be heard whether I agree with them or not. As the saying goes, ““I disapprove of what you say, but I will defend to the death your right to say it.”

I personally feel social platforms were wrong to ban Trump. Whether or not you agree with his politics, it is not, and should never be, the job of big tech to censor a democratically elected world leader. It sets an incredibly dangerous precedent.

Once these platforms start controlling the content, they become a publisher and are inherently biased.  Given the immense power these tech giants wield, I do think there should be safeguards in place to stop them influencing public opinion.

Recently, Poland and Hungary announced they intend to make it illegal to censor social media accounts unless they are breaking the law. I think this is highly commendable, and something all democracies should be following suit in doing.

Paul Mackenzie-Cummins, MD of Clearly PR

There has been a marked shift since the beginning of the pandemic when it comes to the social platforms of most influence within a business context. Without question, LinkedIn was the pre-eminent choice for most within business before the pandemic. But when it changed its algorithms, LinkedIn became less relevant as a news-sharing forum and more tailored for thought leadership content.

On the one hand, this works incredibly well when business leaders seek the insights of their peers who can help make sense of what is happening and enable them to increase their understanding of a subject. This in turn can facilitate better and more informed decision making.

On the other hand, there are times when there is a need to react quickly in response to what is happening and Twitter is perfectly positioned to provide real-time information.

On Donald Trump:

Angela Merkel and other world leaders have condemned the decision by some social media platforms to ban former President Donald Trump, and that has caused controversy. But I do agree.

Whilst one can never condone or overlook the influence that Trump had on the Senate riots that led to the deaths of five people, Twitter especially had allowed him free reign for the duration of his term in office without recourse. Remember when he responded to the Black Lives Matters protest last summer, he posted: ‘When the looting starts, the shooting starts.’ Or when he declared: ‘Don’t be afraid of COVID; I’ve never felt better.’ And the reaction to these posts by Twitter?

Social media platforms do have a responsibility for ensuring that published content isn’t incendiary, defamatory or unethical in any way. But as we saw in January, Donald Trump was only banned by social media companies after the election had been lost and he would no longer have any power to over them. They should be the purveyors of ethical practice but what they have shown is they only step up to the moral plinth when the judge, jury and executioner are removed from their ivory towers.

Nicholas Kelly, CEO of Axela Ltd

Like all social platforms, Twitter has its benefits. I think the lines between some platforms such as LinkedIn and Facebook are becoming increasingly blurred. For me, Twitter still feels more like a notice board, where people put up a subject and then everyone comments underneath. But interestingly, depending on the subject, it’s then left to people in the comments to moderate rather than the person who first posted the question or comment.

That’s why I like Clubhouse; it feels a lot more authentic. You can engage with business leaders around a subject or question and get a real response. If you’re trying to engage and learn, Twitter isn’t the place. It’s more for getting a response out and less for the context around that.

The power of the Twitter algorithm allows to you build your community around your interests by identifying who or what may be of interest depending on who you follow. Therefore, each individual’s experience will differ. It also allows anyone to be directly in touch with anyone else (unless they are blocked) so for example, you could comment on a politician’s post which could be a more direct means of communication and allow debate with others.

I don’t personally find Twitter overly negative; I think it shows a snapshot of people’s responses to a subject. It allows us to see the real thoughts of a person when they don’t think anyone will see what they write, hoping it will get lost in the noise of the platform.

I do think people tend to use it on impulse, though. The fact that many of the responses either use gifs or memes speaks to their quality on the bigger issues.

Twitter is easily accessible, so usage reflects the spectrum of society. This means opinions are reflective of different groups, but not to say that ‘the world of Twitter’ is the same as ‘the world’. The power in real life doesn’t always translate to Twitter, so someone unknown can have an equal opinion, although it would be rare for it be shared as widely. I see as much positive sentiment as negative BUT the danger lies in anonymity – there are some truly shocking posts and unwarranted extreme responses to innocent tweets, similarly, tweets can deliberately provoke, offend etc. It’s much easier to do this whilst hidden behind a profile than in real life.  I also think the useability has to be taken into account; not needing to have a Twitter account to view the tweets whereas the others give you a little peep and cut you off (Facebook, Instagram, LinkedIn)

I think the banning of Donald Trump got a lot more airplay than it might have done, because of who he is. That’s not to play it down in any way – if anyone else had put his sort of content up they would have been quickly flagged and banned. But having controversial people on the platform has actually helped it to bounce back and become more relevant. So as much as they hated what he put up it helped to drive engagement and more users to the platform.

Chris Thurling, Chairman of Armadillo

I suspect I’m typical in that I’ve never taken a strategic approach to Twitter – I signed up and it’s become part of the daily noise. There’s definitely always a blend of personal and business use. The thing that keeps me engaged is the serendipity – every now and again I will unearth something I’d never have found another way.

Compared to other platforms such as Facebook and LinkedIn, which are driven by your friends and network and can be a self-created bubble, Twitter has a more diverse feed, which leads to discovery.

It’s undoubtedly a quieter, more pleasant place without Donald Trump – he seems to have disappeared along with his social media feed. It also goes to show just how powerful the platform is. How could Trump have been the persona he was without Twitter? He certainly bypassed the other normal routes to political power.

To a certain extent Twitter, has retained some of the characteristics the internet had in the 90s (such as idealism and openness) when I was first working with it. However, we’ve also seen its uglier partisan face in the last decade. We’ve seen infiltration by bots and the platform still needs to clean up its act – free speech isn’t a license for death threats and racism. But equally, it can’t be allowed to become sterile – it’s strayed outside the boundaries of what’s acceptable and needs reining back in whilst retaining some of its Wild West spirit.

We’re probably moving in a direction where no democratic supervision is untenable. It’s run by a private organisation which sets rules and if people violate them, then they’re out. However, it makes me uncomfortable that a group of unelected individuals in California are making these decisions with no accountability.

It already feels like a mature platform, 13-14 years down the line – you like or don’t like it. Unlike Clubhouse, this won’t shift massively. Although profits have grown, it’s not the next Apple, Amazon or Google – it’s still a minnow in comparison. Its revenues are disproportionate to its influence.

Q&A with a business leader on the role of social media

Rachael Flanagan, founder of specialist cleaning operation Mrs Buckét shared her views with Business Leader on the matter.

  • What your experience is with Twitter, does it work for you?

Not only is Twitter an incredible tool for brand awareness and growth, but it is also a brilliant place for networking and connection – an advantage of Twitter that is usually overlooked.

While platforms such as LinkedIn are usually the go-to tool for business connection, Twitter also holds nuggets of gold that many business owners underestimate. From connections and interactions with journalists for PR and marketing purposes to live-tweeting at events, or the ability to have quick-fire, succinct and informal engagements with followers and potential prospects – Twitter is a potential goldmine for business owners.

  • How does it sit in the mix for you – is it a positive or negative platform and why?

As a business, we’ve never experienced anything but positivity from Twitter. However, from a personal point of view, I think social media is an overarchingly negative arena, something that has been rapidly accelerated because of the pandemic. Twitter, like Facebook, Instagram, Snapchat and so on, will undoubtedly have individuals or groups of people who choose to be ‘keyboard warriors’ and set out to make it their goal to harass or troll people or businesses.

There have been countless reports of mental ill-health, amongst the younger generation especially, because of cyber-bullying or online harassment, all of which comes from incessant negativity on platforms like Twitter.

  • Is it the job of social media platforms and big tech to ban controversial voices like Donald Trump?

Social media platforms are not there to control or restrict our freedom of speech and while some individuals may say things online that we don’t agree with, this happens in real life too. At least on social media, you have the option to follow or unfollow, delete or block those who fill up your feed with controversial content.

However, in the case of a person like Donald Trump who incited nationwide violence, homophobia, racism and xenophobia time and time again, then yes, it is Twitter’s job to censor this and stop it seeping into the minds of potentially vulnerable people, such as children. There is a big difference between controversy and criminality.

  • Is enough being done to ‘police’ social media? If not, what else needs to be done?

Unfortunately, the true policing of social media will never be possible. If a profile is taken down or a user removed, there’s nothing stopping them from creating a new email address and restarting their hate campaign again.

What does need to happen however is more education from a young age around the issues social media platforms can present. Children are being given access to electronic devices at much younger ages and yet, some are still completely clueless to the dangers and some go on to use and abuse social media as a platform for cyber-bullying without true knowledge of the potential consequences.

  • Should governments be firmer towards how social media can influence public opinion?

I think governments have made great strides in working with social media platforms to drive change already. From creating laws around declaring adverts and paid-for opportunities to reducing the misleading of consumers, to bringing in campaigns that show when images are edited to help reduce issues such as body dysmorphia and eating disorders; it is clear we are taking steps in the right direction.

However, there is certainly more work to do. Hopefully, this promotion around transparency and awareness online will continue long into the future, with a much stronger emphasis on ‘fake news’. Governments now need to work hard on creating education pieces, for children and adults alike, around how to tell if something is fact or fiction online to help reduce the incessant plague we currently have around misinformation.

  • What impact will the emergence of Clubhouse have on the platform?

Having been on a Clubhouse a few times already, it is clear that it is aiming to be Twitter’s biggest competition. This shiny new platform has the immediacy of Twitter through the ability to talk to your connections and engage in interesting and lively conversations, but it adds an extra dimension of safety which Twitter is yet to perfect.

The platform is currently all audio, therefore making it incredibly effective against trolls and there is potential that because the people within the Clubhouse room control who is allowed to speak, this adds a further barrier against problematic individuals or groups. However, one issue it is yet to iron out is the lack of verification process to enter the platform. There’s currently hundreds of Elon Musks on the site but, I can imagine that after testing, this will be the first issue on Clubhouse’s list to fix.

Business Leader Conversations

In this clip, Carrie Rose, founder and CEO of Rise at Seven, talks about the hate she’s received on social media and how’s she’s learnt to overcome it.

This snippet is from our Business Leader Insight interview with Spencer Matthews, TV personality, former Made in Chelsea star and founder and CEO of the Clean Liquor Company. In this clip, Spencer explains the role of social media in his business life.

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