Does Elon Musk’s verification fee for Twitter’s blue tick, bode well for brands?

Twitter has had a tumultuous few weeks. It took a while for Elon Musk’s entry into Twitter HQ to "sink in". But once he got through the door, he’s been busy, shaking the foundation of what the microblogging social media platform stands for. His latest proposal is to charge $8 (approximately Rs 662) per user to get one’s profile verified with a blue tick.

The $8 fee applies only to USA-based Twitter users. Musk mentioned that the membership fee would be adjusted in different countries according to the respective nations' purchasing power parity.

Some benefits that the users will get, while signing up to be a paid user, include priority in replies, mentions and searches (which Musk claims is essential for defeating spam/scam posts), half as many ads, and the ability to post long video and audio.

Kunal Shah, founder, CRED (a Bengaluru-based fintech company) and a verified Twitter user, succinctly sums up what the blue tick represents on the microblogging site: clout.

Varun Duggirala, founder and creator-in-chief, Plot Device Entertainment, pauses before reacting to the new development. He stresses that it’s important to look at what data inputs are required for verification.

"This could actually help reduce the fake bot problem that has plagued Twitter for ages. It could also enable individuals to have to sign up with their real credentials versus fictional ones."

Before Musk’s announcement, a user could apply for verification on Twitter, and there were certain criteria for the blue-verified badge to be awarded. Twitter’s Help Center mentions that for a profile of public interest to be verified, it has to be authentic, notable (associated with a prominent individual or brand) and active. An individual applying for verification had to provide a photo of a valid government-issued identification document to complete the process.

Duggirala adds that the verification badge was always meant to verify a popular personality’s account to ensure that it stands out from possible fake ones. He adds that in many ways, this is how it should be across platforms.

Akshay Gurnani, co-founder and CEO of Schbang feels that this new development might take away the importance of the blue tick and the onus is now more on the content consumer to ensure they themselves verify the source, which can be tough.

"I hope Twitter improves the automation of content moderation to prevent fake news and misinformation from spreading. I do however understand that there will be a secondary tag underneath the name of public figures which will further authenticate prominent users," says Gurnani.

Shradha Agarwal, co-founder and CEO of Grapes, says it is still too early to attempt to estimate how the new verification rules will shape up in the future.

"But as the sale of blue tick will open to the masses, it will raise concerns, with respect to the entire credibility of the verification. As people look up to the personalities with a blue tick, it is likely that with ticks being purchased in the future, the relevance of the account may be compromised. This could even give rise to fear of misinformation and fake news."

On October 27, Musk updated his Twitter bio. He’s now the ‘Chief Twit’, which marks the closure of the Twitter acquisition deal. That same day, he tweeted a note to the brands that advertise on Twitter, in a bid to address speculations about why he bought the social media platform.

Musk claims to have ambitions of building a ‘digital town square’, where healthy debates on a range of beliefs, can take place. He tweeted, "Low relevancy ads are spam, but highly relevant ads are actually content."

Duggirala thinks Twitter has never been able to truly leverage advertising revenue and, in many ways, functions as a news publishing and communication platform.

"Keeping that in mind, the subscription route makes sense, looking at how all media news platforms have moved. Keep in mind the POV - that while advertising serves to provide a free version of any platform, the ability to build a no/low ad tier is something that provides a better user experience for the end user. As for brands, it’s about moving towards a content-first approach and working with the platform to find more innovative forms of audience connection."

Gurnani draws a parallel between the AVOD and SVOD subscription models used on OTT platforms and the subscription model that Twitter is attempting to bring into place.

"Here, the user is not only a consumer, but also a creator on the platform. While the number of ads a paid user sees will be half of that, of a free user, that doesn’t necessarily affect advertisers because it’s only the number of impressions being served to a paid user that will be low, besides that nothing really changes. In fact if as a part of the targeting parameters, twitter allows us to choose whom we serve our ads to (verified vs non-verified users) that would be an added bonus.," says Gurnani.

Puneet Bajaj, VP, Strategy, Kinnect theorises that the quality of conversation and opinions that remain on the platform will have an impact on the advertising spends on this platform.

"Brands are becoming more and more conscious of the kind of opinions/content along with which their ads are seen. As far as misinformation is concerned, we anyway witness examples every other day of verified handles spreading misinformation only to delete the tweets later on," says Bajaj.

Agarwal points out that Twitter has had a subscription model for a while now. She is referring to Twitter Blue, a monthly subscription plan that offers paying users access to premium features on Twitter.

Some of these features include an ‘undo tweet’ feature and ad-free article reading options. So far, Twitter Blue has been launched in the US, Canada, Australia, and New Zealand, and is currently priced at $4.99 (approximately Rs 412) per month.

On the other hand, brands are wary of all the changes happening at Twitter and Musk has a reputation of being a volatile person. Immediately after the acquisition, Musk fired CEO Parag Agrawal, CFO Ned Segal, general counsel Sean Edgett, and head of legal, policy and trust Vijaya Gadde.

On November 2, the Interpublic Group (IPG) reportedly recommended to its clients that they exercise a 'temporary pause' on spending on Twitter ads following Musk’s takeover. On October 28, one day after Musk’s Twitter takeover, General Motors (GM) announced that it was going to pause advertising on Twitter.

Duggirala says that brands will now be watchful and analyse the new shape that Twitter takes in its ‘Elon era’. He adds that his will be a period of pause for advertisers, but the long-term ramifications will really depend on how things evolve with the changes that are happening.

Given Musk's unconventional working style, Agarwal is unsurprised that brands and agencies are putting advertising on Twitter, on hold. "They may possibly divert their spends to other social media platforms, or this could open an opportunity for a new microblogging platform, as a whole."

"Personally, I believe that it will not have any profound impact on the advertisers, drawing example from YouTube's ‘no ads’ option, where the majority of the users don’t use this feature. Likewise, even on Twitter, it will be just a fraction of users, who will likely seek this option."

Bajaj agrees, mentioning that from the trends observed, Twitter isn’t that high a priority order for most brands - except for entertainment brands and for product launches; mostly because of its lack of its effectiveness, viz a viz other platforms.

"In current circumstances, you run the risk of being seen as anti-free speech if you hold off on advertising, but you could also be labelled as indirectly supporting hate speech if you continue to leverage the platform for commercial gains. The policies that are rolled out by the proposed content moderation council at Twitter will play a pivotal role in deciding the stance brands and agencies take," says Bajaj.

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