Why Twitter’s more popular on Madison Avenue than Wall Street
Dick Costolo has been under attack lately, with activist investors calling for him to be removed as Twitter CEO. But you won’t hear such complaints on Madison Avenue.
Ad agency executives — the people ultimately responsible for Twitter’s financial performance — said that replacing Costolo would fail to improve Twitter’s perception among agencies and brands. While Wall Street might be calling for Costolo’s job, Madison Avenue contends that his leadership — or perceived lack thereof — is not an issue for the company.
“I’m a big advocate of Dick’s. I think he’s the right leader for that organization,” Jordan Bitterman, chief strategy officer at media agency Mindshare, told Digiday.
Twitter did not return a request for comment at time of press.
Skepticism about Costolo’s performance began this past summer when major financial firms started unloading Twitter shares. On Nov. 7, 2015 — a year after Twitter IPO’d — Twitter’s stock price, at $40.84, was slightly lower than when it closed on its first day of trading ($44.90), and Walter Price, manager of Allianz Technology Trust, told The Wall Street Journal that people were “losing confidence” in Costolo. Other financial analysts quickly followed suit, many speculating about whether Costolo would step down during Twitter’s earnings call on Thursday.
The ad industry does not share those concerns, however, according to multiple executives who spoke to Digiday. While not all of them have interacted with Costolo directly, the executives said Costolo has helped construct an agency-relations team that is attentive and receptive, which has inspired confidence with agencies and, in turn, their brand clients.
As long as that team continues doing its job, Costolo’s role as CEO is a non-issue for Matt Wurst, general manager of social media at digital agency 360i.
“The sign of a good executive is delegation and trust, and Twitter has developed a strong agency- and brand-support service model that we trust and has helped us,” Wurst said. “Who Twitter’s CEO is doesn’t matter as long as we are being serviced and managed well.”
Wurst, who has never met with Costolo, said he was particularly impressed with how quickly Twitter’s agency team has grown during Costolo’s tenure as CEO. When 360i approached Twitter in 2009 about bringing its brand clients on the platform, Twitter had no one for 360i to speak with. Costolo was appointed CEO in October 2010, and by 2011, the company had a team in place to meet marketers’ needs. Now, Twitter sends a designated liaison to 360i once a week.
“They listened to the needs of the industry and optimized around them, and that’s a reflection of the executive model,” Wurst added. “Whether he has his hands dirty or not, he recognized a need and developed a solution to fix it.”
Rachel Pasqua, who runs the mobile practice at media agency MEC, said pessimism about Costolo stems from Wall Street’s unfair comparison Twitter and Facebook, the world’s largest social network.
“They’re supposed to compete with Facebook, but they’re two different things used for different purposes,” Pasqua said. “Ousting him won’t change things overnight. Twitter’s lack of Facebook-level scale isn’t because the CEO isn’t doing a good job. It would be short-sighted on the shareholders’ part to think getting rid of him will solve Twitter’s problems.”
And while she, too, has not interacted directly with Costolo, she attested to the company’s agency relations with him as CEO. Twitter has routinely been willing to “go the extra mile” with MEC and send staffers to help the agency present to clients.
Bitterman said Twitter’s was “the best sales team in the industry.”
At other times, Costolo himself has gone the extra mile to help an agency. Costolo once agreed to have Bitterman interview him on stage in front of 20 of Mindshare’s client representatives and 30 of the agency’s own staffers.
“No one at Facebook is rallying Mark [Zuckerberg] or Sheryl [Sandberg] to do that,” Bitterman said.
Costolo has also proven himself an excellent delegator, Bitterman said, echoing Wurst. Adam Bain, Twitter’s CRO, is an “all-world” executive, and Kevin Weil, whom Costolo appointed head of product in October 2014, is beloved within Twitter and has brought some much-needed stability to the position, said Bitterman.
“They love Kevin there,” Bitterman said. “They talk effusively about him.”
Paradoxically, Bain has been said to be the likely successor to Costolo if activist investors oust the standing CEO.
That’s not to say that Twitter is flawless in the eyes of agencies. Wurst said he would like to see Twitter invest more in measurement and demonstrate to brands that social media ads produce actual business results. Overall, he gave Twitter a “B” for catering to marketer needs. Razorfish’s global vice president of social media, Chris Bowler, said that Twitter has been less assertive recently and wondered why it hasn’t more aggressively sold the agency on its new buy button.
Bitterman, too, said Twitter has its shortcomings, mainly that Twitter was inscrutable to those unfamiliar with its endemic language of at mentions, retweets, favorites and hashtags.
But both Bitterman and Wurst said that Twitter is also receptive to such criticisms and is earnest about addressing them.
So while Wall Street might determine how to price Twitter’s stock, it’s agency execs who decided how much money to give Twitter. And for them, removing Costolo would, at best, not address Twitter’s problems and, at worst, would be counterproductive.
“It’d be a big mistake to remove him,” Bitterman said. “Wall Street is very fickle. No one on Madison Avenue would be calling for Costolo’s head.”
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