Advertising Exodus To Cost Elon Musk’s X $75m – Report

The advertising exodus at Elon Musk’s X (formerly X) is reportedly going to result in a hefty financial impact for the micro-blogging platform.

The New York Times reported last Friday that X could lose as much as $75 million in advertising revenue by the end of the year.

It comes as X is embroiled in another row over anti-Semitic content on the platform, after a researcher recently revealed Nazi content appearing alongside adverts of big name firms, which triggered yet another lawsuit.

Elon Musk also endorsed an anti-Semitic conspiracy theory, which was condemned by the White House and others.

Advertising pause

Now the New York Times (NYT) reported that it had viewed internal documents from X, which showed more than 200 ad units of companies from the likes of Airbnb, Amazon, Coca-Cola and Microsoft, have either halted, or are considering pausing their ads on the social network.

The report states that X could lose as much as $75 million in advertising revenue by the end of the year, as advertisers move their ad spend to less risky platforms from the likes of Facebook, TikTok or LinkedIn.

The internal documents citing by the NYT reportedly come from X’s sales team and are meant to track the impact of all the advertising lapses this month. This includes those by companies that have already paused and others that may be at risk of pausing their advertising spend.

In September Apple said it was ‘constantly’ evaluating its decision to advertise on Elon Musk’s X, amid a previous anti-Semitism row.

The internal documents reportedly list how much ad revenue X staffers fear the platform could lose through the end of the year, if advertisers do not return.

According to the NYT, X said last Friday $11 million in revenue was at risk, and the exact figure fluctuated as some advertisers returned to the platform and others increased spending.

Busy period

X reportedly said the numbers viewed by NYT were either outdated or represented an internal exercise to evaluate total risk.

But it is clear that any advertising pause during the last three months of the year is going to hurt, as that last quarter is traditionally the platform’s strongest quarter as brands run holiday promotions for events such as Black Friday and Cyber Monday.

Twitter it should be remembered, in the last three months of 2021 (prior to the Musk takeover) reported fourth-quarter earnings of $1.57 billion in revenue, of which nearly 90 percent came from advertising.

The internal documents, however, reveal that more than 100 brands are shown as having “fully paused” their ads, while dozens of others are listed as “at risk”, the New York Times reported.

Ad declines

Twitter has been hit by previous advertising pauses, which saw X CEO Linda Yaccarino in August publicly affirming the company’s commitment to brand safety for advertisers. Yaccarino also claimed that X was close to break even.

That came after two major brand names confirmed they would suspend advertising on X after their ads appeared alongside an account which shared content celebrating Hitler and the Nazi Party.

In August Elon Musk threatened to sue the Anti-Defamation League (ADL), citing the impact on Twitter’s advertising revenue.

New York-based Anti-Defamation League is an international Jewish non-governmental organisation that specialises in civil rights law and combats anti-Semitism and extremism.

It had alleged that anti-Semitic posts on X increased sharply after Musk bought the site in October 2022, and the platform subsequently reinstated extremists and conspiracy theorists, while allowing the harassment of former members of its now-dissolved trust and safety council.

Elon Musk himself has previously admitted a massive decline in advertising on X, and in the summer Musk tweeted that the social media platform has lost about 50 percent of its ad revenues since he took over the company in October 2022.

Reuters has previously reported that Twitter’s US ad revenue has declined at least 55 percent year-over-year each month since Musk’s takeover.