Even before big brands like Apple, Disney and IBM halted their advertising spending on According to an October forecast from Insider Intelligence, significant, according to the latest analyst updates.
X faces a potential loss of significant ad spend, as several advertisers have paused or stopped their ad campaigns on Brands that have since stopped advertising on X include Apple, Comcast/NBCU, Disney, Warner Bros., IBM, Paramount, Lionsgate and the European Commission.
Although Like Twitter, ads accounted for about 90% of the company's revenue, and API licensing fees and subscriptions also contributed to the company's results. But Musk's plan to bolster the X subscription plan with a new set of features, including payment verification, has not proven successful enough to withstand the departure of large advertisers in the long term. That doesn't necessarily mean that
InsiderIntelligence warns, through analyst Jasmine Enberg, that the latest departures of advertisers could cause a new exodus.
"The damage to X's advertising business will be severe," he predicts. "An exodus of big-name advertisers will inspire other advertisers to follow their lead, and there is likely already a long tail of less vocal advertisers who have pulled back."
While brands generally understand the risk of running ads on user-generated content, they typically don't find themselves in a situation like this, he also notes.
“Advertisers are used to dealing with brand safety concerns on social media, particularly during periods of political and social tension or war. But they are not used to a platform owner amplifying misinformation and hate speech, and emboldening conspiracy theorists,” says Enberg. “The impact of Musk's words poses a great danger to society. Twitter's influence has always been greater than its base of followers. users and their advertising revenue, and although the cultural relevance of the platform has diminished, Musk and X remain an important part of the public conversation,” he adds.
The complaints against Musk come along with a report from Media Matters, which showed ads appearing alongside posts praising Nazi ideology. However, an X executive, Joe Benarroch, rejected Media Matters' reports.
Benarroch, who joined He stated in a post on X. that Media Matters used 3 accounts and then constantly updated the posts timeline to see 13 times the number of ads published, compared to the average. In other words, he is saying that a typical user would not have the same experience regarding ad placement.
Media Matters created 3 accounts and followed 30 accounts similar to the ones in the article. They then constantly updated the posts timeline (13 times the number of ads shown to this user compared to the average). 50 impressions published compared to the content of the article,… -Joe Benarroch (@benarroch_joe) November 18th 2023
Still, X was on a downward trajectory even before these recent debacles. Prior to this, X's advertising revenue was already forecast to decline by 54,4% from 2022 to 2023, a considerable drop for the platform that Musk has managed for about a year so far. AND Musk himself said in September that advertising revenue in the United States decreased by 60%, citing pressure from the Anti-Defamation League which accused the owner of anti-Semitism. (Musk, in turn, threatened to sue the ADL.)
Insider Intelligence's numbers are in the same ballpark: its forecast predicts that X's US ad revenue was expected to decline nearly 55% year over year, and 54,4% worldwide. And this, it should be noted, was calculated before these latest advertiser departures.
Analysts also estimated that monthly active users of Twitter charge at the end of October 4,1.) US users are also forecast to decline, the firm predicts: down to 348,6 million by 2024, a decline of 363,7% from 2023 million in 373,6 and a peak of 2022 million in 2022.
Enberg also suggests that Yaccarino's communications to assure advertisers of X's brand safety reinforcements won't work, given that Elon Musk himself is undermining them. Forbes recently reported that senior advertising executives have been pressuring Yaccarino to resign, suggesting that their own reputation is now at risk as a result of Musk's actions. So far, it appears those requests have fallen on deaf ears, as Yaccarino has been posting on X in support of free speech and the company's vision.
“What we are doing at X is important and attracts everyone's attention. I believe deeply in our vision, our team and our community,” she wrote in a post on X on Monday morning. “I am also deeply committed to the truth and there is no other team on earth that works as hard as the teams at ”the post said.
Insider Intelligence has not yet calculated the impact of recent advertiser departures on its forecast, but says it will do so in its next update.
