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Can Twitter’s Odd Couple Make It Work? Elon Musk and His New CEO Are About to Find Out

<p>Musk announced her arrival before she had a contract. They haven’t formally agreed on a budget or headcount. And Linda Yaccarino hasn’t even gotten to the hard part yet.</p>
 
Linda Yaccarino, the new CEO of Twitter, and Elon Musk. PHOTO ILLUSTRATION BY EMIL LENDOF/THE WALL STREET JOURNAL; PHOTOS: GETTY IMAGES

Linda Yaccarino, the new CEO of Twitter, and Elon Musk. PHOTO ILLUSTRATION BY EMIL LENDOF/THE WALL STREET JOURNAL; PHOTOS: GETTY IMAGES

If the new duo running Twitter were a Hollywood pitch, it would be “Mad Men” meets “Mad Max.”

Linda Yaccarino, NBCUniversal’s former ad chief, spends lavishly, hosts parties at luxury hotels and has built a lifelong career in advertising. Elon Musk sleeps on factory floors and has eschewed ad spending for decades.

Yaccarino began this week as the new chief executive of Twitter, which Musk owns. How the two will work together is the talk of Madison Avenue, leading many to ask: Can this new odd couple make it work?

The answer will decide the future of one of the world’s most important social-media companies. Many big-name advertisers have fled since Musk took control of Twitter in late October, and Yaccarino is tasked with regaining their trust. Luring them back is essential to stabilizing the company, which makes most of its revenue from ads. 

Musk has a history of turning to a strong executive to be the yin to his yang. At rocket-maker SpaceX, where Musk is CEO, his No. 2, Gwynne Shotwell, has long been responsible for the day-to-day, freeing him up for the work he enjoys—like focusing on his project to send humans to Mars. 

He has aimed for something similar at Tesla TSLA 4.06%increase; green up pointing triangle, where he is also the CEO but has struggled to find a lasting No. 2 to handle duties he finds less enjoyable, such as sales. At one point, he tried to recruit Sheryl Sandberg, the author of the bestselling “Lean In” who at the time was Facebook’s No. 2, to fill that role at Tesla. She declined. 

In Yaccarino, Musk is turning to a seasoned advertising executive who oversaw a 2,000-plus-person staff at NBCUniversal. She has spent more than three decades in the television industry perfecting the time-honored art of schmoozing ad buyers and brand leaders—spending big on events and doling out thoughtful gifts. Her effort has won her a reputation throughout the industry as someone who works hard to win over clients and build a business. Despite that, internally she wasn’t actively considered to be a contender for CEO when NBCUniversal named Jeff Shell into the role in 2020 or when he departed earlier this year, people familiar with the matter said. For several years, her team tried to change that by fashioning her public persona as the next Sandberg, including crafting a book proposal, according to people familiar with the effort. 

In jumping ship for Twitter, Yaccarino joins a company that has about 1,500 people, many of them engineers and programmers who will still report to Musk in his role as overseer of product development. 
 

Elon Musk onstage with Linda Yaccarino in April, before she was hired to be Twitter’s new CEO. PHOTO: REBECCA BLACKWELL/ASSOCIATED PRESS
Elon Musk onstage with Linda Yaccarino in April, before she was hired to be Twitter’s new CEO. PHOTO: REBECCA BLACKWELL/ASSOCIATED PRESS
 


She inherits an advertising staff at Twitter that’s dramatically smaller than at her last job. The employees have survived a dizzying seven months that have included rounds of layoffs and clients fleeing, in part, over concerns about the dramatic upheaval and uncertainty around Musk’s ownership, his changes to content moderation and his own controversial tweets.

At the end of May, Twitter’s second-quarter ad revenue globally was down about 40% compared with a year earlier, according to people familiar with the matter. In the U.S., where the company has been under greater scrutiny, these people said, the business was harder hit, with sales falling about 60%. While many brands remain on the sidelines, some such as Oreo-maker Mondelez have resumed spending on the site, The Wall Street Journal has reported.

‘An aversion to advertising’

Yaccarino has agreed that Musk will keep speaking his mind on Twitter, he said last month at the Journal’s CEO Council Summit.

But the two had not ironed out much more before diving headlong into business with each other. She hadn’t signed an employment contract when Musk tweeted last month that he had hired somebody for the role and, while they’ve discussed budget and headcount, they have not come to any formal agreement on numbers, people familiar with the matter said. The idea is that they will work out the specifics now that Yaccarino has started as CEO. 

The gamble is they will ultimately develop a relationship similar to what he has at SpaceX: Musk will spend his time building out Twitter’s features and broader vision, and Yaccarino will focus on the day-to-day of running the company.

Yaccarino’s experience and relationships could make her a valuable partner for Musk. He has said he wants to make Twitter less dependent on advertising, but still needs to find a way to get brands to resume spending big. 

But Musk has long held views on the art of selling—and about advertising, specifically—that are deeply at odds with Yaccarino’s métier.  

“I’ve had an aversion to advertising because there’s…just too much trickery,” Musk said at a Tesla shareholder meeting in 2019. “They’ll have a bad product and then put it in a nice environment with good-looking people and then, like, trick you into buying it.” 

Musk has long harbored a disdain for the hard sell, preferring that products sell themselves. It’s a philosophy that dates back to his early days as an entrepreneur in Silicon Valley, when he was running the startup now known as PayPal and he witnessed how word-of-mouth recommendations ignited interest in the digital-payments platform.

“Product matters incredibly because, if you’re going to recommend something to somebody, you’ve got to really love the product experience,” he said in 2003 at a Stanford University event. “Otherwise, you’re not going to recommend it because you don’t want to burn your friend.” 

He has taken a similar approach at Tesla, where he has often prioritized engineering over sales, including an aborted plan in 2019 to close most of the electric-vehicle company’s physical stores and transition to a mostly online sales model. 
 

Elon Musk speaks at Tesla event in Austin, Texas, in April. Musk has used such events to generate publicity for Tesla, instead of relying on advertising to sell cars. PHOTO: SUZANNE CORDEIRO/AGENCE FRANCE-PRESSE/GETTY IMAGES
 


It was just one of the unorthodox efforts he made in the past roughly two decades to build Tesla from a scrappy startup into a consistently profitable car company. Along the way, he needed every dollar to keep the company afloat and has often touted sleeping on the factory floor while dealing with various crises.  

Through all of that, Musk, 51 years old, has avoided following rival auto executives down a path of spending big on advertising, preferring to attract attention through press reports detailing his cars’ impressive capabilities, his use of Twitter, high-profile customer events to introduce new vehicles or other stunts, such as including a Roadster sports car in the cargo of a SpaceX rocket launch.

From different worlds

A Long Island native and Pennsylvania State University alumna, 60-year-old Yaccarino spent about two decades at Turner, whose networks are now part of Warner Bros. Discovery, before joining NBCUniversal in late 2011. Her team generated more than $100 billion in ad sales during her tenure, or roughly four times the amount of money Twitter collected in the same period.  

Much of the difference between Musk and Yaccarino can be chalked up to style and approach and how their professional lives evolved. 

He came from the world of startups; she was a corporate creature. 

When Musk isn’t launching rockets or building cars, he is bound to turn up in the gossip columns with his latest celebrity girlfriend or attend the Burning Man festival as he’s done for years. In her off time, Yaccarino is known for her weekly family red sauce dinners dubbed “Sunday Sauce” with her tightknit Italian family, which includes two sisters, one of whom is her identical twin. 

Among the early changes at Twitter under Musk, the company’s public-relations team was effectively disbanded and an automated email message was set up to respond to press inquiries with a poop emoji. 

Yaccarino’s first hire at Twitter this week was Joe Benarroch, who was brought on in a senior business-operations role. He had been a close lieutenant to Yaccarino at NBCUniversal, where he worked as a senior PR executive after having previously worked at Facebook in a similar position. He has played a big role in helping shape Yaccarino’s public profile as a leader, according to people familiar with the effort.

During NBCUniversal’s all-important annual presentation for ad buyers in 2018, where the bulk of the coming TV season’s ads are sold, Yaccarino wore a dress custom designed for her by Jason Wu, a top designer who also is credited with designing Michelle Obama’s gowns for both of Barack Obama’s inaugural balls.
 

Linda Yaccarino at a big NBCUniversal event for advertisers in May 2018. Yaccarino was in rehearsals for this’s years event when Musk tweeted he had hired a woman to lead Twitter.PHOTO: VIRGINIA SHERWOOD/NBCUNIVERSAL/GETTY IMAGES
Linda Yaccarino at a big NBCUniversal event for advertisers in May 2018. Yaccarino was in rehearsals for this’s years event when Musk tweeted he had hired a woman to lead Twitter.PHOTO: VIRGINIA SHERWOOD/NBCUNIVERSAL/GETTY IMAGES


That same year, Yaccarino hosted a party for top ad buyers and leaders of major brands at New York’s Baccarat Hotel to celebrate Prince Harry and Meghan Markle’s nuptials. Guests drank Champagne and sipped tea, according to people familiar with the event. For added whimsy, Yaccarino had attendees pick out fascinators and try on Swarovski jewelry.

At NBCUniversal headquarters, Yaccarino kept a special closet full of gifts—from high-end candles to cashmere blankets—that she would use to follow up with advertisers after meetings or to mark special events in a client’s personal or professional life. The cost of those gifts was in part borne by her, one of the people said. 

She has hosted an annual trip to the tony Cal-a-Vie Health Spa in Southern California for top female ad buyers and marketers. In between massages and facials, attendees heard from NBCUniversal TV talent, such as NBC “Today” host Jenna Bush Hager and MSNBC morning anchor Mika Brzezinski, who doled out advice on everything from health to business, according to several people who attended. Guests at the all-expenses-paid retreats were often greeted with swag bags in their rooms that included goodies such as Lululemon workout gear. One year they were invited to work out with the Kardashians’ personal trainer, Gunnar Peterson. She also once hosted a “shoe bar,” where attendees could customize their own sneakers.

Each fall, she had NBCUniversal co-sponsor The Female Quotient’s annual dinner, a popular evening for more than 1,000 women in the advertising industry held during New York’s Advertising Week. In 2021, when the pandemic prevented people from traveling to Tokyo for the Summer Olympics, which NBC broadcasts, she helped organize a watch party in Orlando, Fla., for families of athletes. 

In the summer, during the advertising industry’s biggest event, the Cannes Lions International Festival of Creativity in France, she would ensure that NBCUniversal went all-out as rival media companies, publishers and tech giants competed to entertain brand leaders on the French Riviera. Last year’s effort culminated in a “Below Deck”-themed party, promoting NBCUniversal’s popular Bravo show, aboard the 156-foot superyacht named the Luisa with DJ’ing by Boy George.

Before Musk, Twitter was also known for its extravagant efforts at wooing advertisers. 

At Cannes, for example, the company would send about 100 employees and spend several million dollars entertaining advertisers with splashy events, including taking over a chic beach club—temporarily renamed Twitter Beach—to host parties, according to people familiar with the matter. Entertainment one year included singer Tony Bennett, courtesy of Twitter’s event partner Spotify. 
 

A brunch event hosted by Twitter at Cannes in 2018. Under Musk, the company is dialing back on such promotions at Cannes this year. PHOTO: FRANCOIS DURAND/GETTY IMAGES FOR TWITTER
A brunch event hosted by Twitter at Cannes in 2018. Under Musk, the company is dialing back on such promotions at Cannes this year. PHOTO: FRANCOIS DURAND/GETTY IMAGES FOR TWITTER


Unlike Google and Facebook, which have a healthy automated advertising business for small spenders, Twitter has historically relied heavily on big spending by major brands, and has used old-school sales tactics to land those accounts. 

Under Musk, however, Twitter has cut back on the schmoozing. There’s no Twitter Beach planned this year for Cannes, which begins June 19, according to some of the people. The company is expected to send roughly a dozen people. 

Even Yaccarino isn’t expected at Cannes. She is limited in what she can do with advertisers through July as part of her contract with NBCUniversal, people familiar with the matter said.

When Musk announced last month via a tweet that an unnamed woman would become CEO of Twitter,  Yaccarino was in rehearsals for NBCUniversal’s annual presentation to advertisers at Radio City Music Hall. She had not notified her employer that she was planning to leave, according to people familiar with the matter. Hours later,  the Journal reported Yaccarino was the hire. She offered to stay on long enough to help with the event and with ad-deal negotiations, but NBCUniversal declined, the people said. 

Since taking control of Twitter, Musk has worked quickly to cut costs that he considered unnecessary, saying at various points the company was at risk of bankruptcy without dramatic spending reductions. In March, he suggestedTwitter could be cash-flow positive this year. Going forward, Musk plans to invest in advertising and relationship building as long as he can track the return on investment, a person familiar with his thinking said.

Musk’s chaos

A likely challenge for Yaccarino will be Musk’s unpredictability and mercurial nature that has a long-documented history of upending his executives’ plans and overshadowing his companies’ accomplishments. 

In contrast to her polished and scripted approach to landing deals, Musk has overseen an often chaotic sales process at Tesla. For years the company vacillated between soft-sales tactics around educating customers on the new and expensive technology of electric vehicles and frantic end-of-the-quarter pushes to make the company’s delivery targets and generate needed revenue. In those hectic periods, Musk would swoop in, helping deliver cars himself, or, in an especially dire time, ask customers for help on Twitter. And if the fate of the company wasn’t enough of a motivator, Musk was known to threaten people’s jobs if they didn’t come through or, in a fit of pique, oust them outright in what’s been dubbed by outside observers as “rage firings.”  

When sales of Tesla’s Model S sedan softened years ago, Musk’s team explored the idea of advertising on Facebook to boost sales but scuttled the idea, in part because of their boss’s distaste for advertising, according to people familiar with the effort. Instead, they said, the company relied on a lease deal for the vehicle that helped juice deliveries, as well as an update to the car that improved its performance. 

At Tesla, executives long ago learned to justify spending and decisions to Musk based on data. Musk has balked over the years at some typical practices used to motivate sales teams, people familiar with those efforts said. In 2016, for example, Musk grew agitated over his sales leaders’ plans to treat top performers to a special weekend at a resort, which he would later call a “boondoggle.”

“I just gave a company talk making it clear that we need to save costs or we are f—ing doomed,” Musk wrote in an email to his leaders that was disclosed in legal records. 

Given all of Musk and Yaccarino’s differences, several Madison Avenue insiders are privately speculating about how long the union will last. Yet, both have shown signs they’re trying to adapt to each other. 

Shortly after naming Yaccarino as CEO at Twitter, Musk was publicly warming to the idea of advertising for Tesla, even acknowledging the weird position he has as head of both the world’s most valuable automaker that doesn’t advertise and a social-media company that depends upon ad dollars. 

“It is indeed ironic,” he told Tesla investors last month, a few days after the Yaccarino announcement. “I guess I should say advertising is awesome. Everyone should do it.”

And, in a change of long-held beliefs, Musk added: “So, we’ll try a little advertising and see how it goes.”

Alexa Corse and Patience Haggin contributed to this article.

Write to Tim Higgins at tim.higgins@wsj.com, Jessica Toonkel at jessica.toonkel@wsj.com and Suzanne Vranica at Suzanne.Vranica@wsj.com

 


 

Author: Editors Desk

Source: WSJ:

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