Why advertisers have to stick with Qatar – but not with Twitter

The World Cup needs advertisers, but the advertisers need the World Cup more. Twitter needs advertisers, but advertisers can get along without Twitter.

Two of the biggest stories of the moment give a stark illustration of the power, and lack of it, in the media space. The World Cup is huge. An estimated 5 billion people will watch it, out of the 8 billion of us on the planet. That’s way ahead of the Tour de France (3.6 billion), the Olympics (3.6 billion in Rio de Janeiro in 2016), and 2.6 billion for the cricket World Cup in 2019.

For any advertiser with global ambitions, access to nearly two-thirds of the world’s population is one of the things you cannot ignore, even if within some of your markets there is political pushback against the regime of the host country. You may make a strategic decision that your marketing budget is better spent elsewhere, but if you take the plunge, you stick with it.

And so the main advertisers have hung in there. Bloomberg went round the biggest hitters, including Adidas, Volkswagen and Coca-Cola, asking them about their position. “None of the seven Fifa sponsors said they would make any changes to their global advertising plans to reflect concerns for human rights,” it reported.

Of the 69 sponsors of national teams contacted by the company, 20 responded to confirm their commitment to human rights, though they would not say if, or how, their marketing might change, while 13 said they would make adjustments – but these were mostly enterprises that have little business with Qatar.

As far as Qatar is concerned, there is the wider point that it is currently in an extremely powerful position, in that last year it was the third-largest gas exporter in the world, after Russia and the US. Its commercial clout is based on that, not the hosting of the World Cup.

Now contrast that with Twitter. Since Elon Musk took over, a string of companies have cancelled or suspended their advertising on the social media platform. These include General Mills (for non-Americans, it is a huge producer of packaged foods, including Cheerios, Dunkaroos and Haagen-Dazs) and Audi.

Leave aside General Mills because it is very much an American corporation, but Audi? Is Musk’s record on human rights more morally reprehensible than that of Qatar, which Audi’s sister brand VW is happy to support? He has certainly made a huge contribution to the environment, leading the switch to electric cars, so maybe that should be set on his side of the scale – with Qatar’s natural gas exports on the other side.

Actually, I don’t think it is helpful for an economics commentator to opine on moral issues such as this – everyone is entitled to their opinion – but I do think it is right to point out where power lies. In the case of Twitter, it is with the advertisers, whereas in the case of the World Cup, it is not. Why?

There are several parts to the answer. One is that the key audiences for the World Cup are not American, so the US view of the world and the values of many of its citizens are not relevant in that sphere, whereas on Twitter they are. (Writing this in Washington DC, I think it is quite difficult for liberal Americans to accept that there is a world in which the ideas that dominate the debate here are simply not thought about very much elsewhere.)

Another is that while advertising on Twitter gets you to an important segment of the top-end market, it does not get you to the burgeoning global middle-classes of India, China, Nigeria, Indonesia and so on.

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Still another is the difference between online advertising and mainstream media. Online revenues are surging, squeezing out mainstream and legacy media. But the World Cup is a mainstream event, actually the greatest one, so it offers a way to fight back, which is especially important for television. If you want to attract, for your product or service, the sort of attention that only old-style TV advertising can generate, you don’t have many options.

Finally there is association. Quite aside from the Musk business, advertising on Twitter associates your enterprise with people who tweet. Advertising with the World Cup identifies you with the greatest sportsmen in the world. Who would you rather be associated with? Huh?

Boiled down, I think the big point is simply this: football dominates the world, and Twitter doesn’t. I find that rather comforting in these troubled times.