Elon Musk’s social media platform, X, is bracing for a substantial decline in ad revenue, estimated at $75 million, as major brands withdraw amidst concerns over antisemitic content.
In the aftermath of Elon Musk’s recent involvement in an antisemitic content controversy, industry giants such as Microsoft, Airbnb, and Coca-Cola have garnered significant attention for contemplating an exit strategy from advertising on the platform, according to reports by The New York Times based on internal documents.
Elon Musk’s platform, X, formerly known as Twitter, has recently gained attention as it engages in legal proceedings against Media Matters after the antisemitic content saga on its platform.
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Reports suggest that Elon’s X could potentially lose up to $75 million in advertising revenue by the end of 2023. The decline appears to result from numerous significant brands halting their marketing campaigns on the social media platform in response to concerns over Elon Musk’s recent association with antisemitic content.
Prominent tech giants, including IBM and Apple, had suspended advertising-related activities on X earlier following the display of antisemitic content.
Internal records reviewed by The New York Times reveal that X faces more significant challenges than initially disclosed. Concerns regarding Musk and the platform extend beyond companies like IBM, Apple, and Disney, which halted their advertising on X last week.
The documents outline over 200 ad units from companies such as Airbnb, Amazon, Coca-Cola, and Microsoft, many of which have either suspended or are contemplating pausing their advertisements on social networks.
In a statement on Friday, X mentioned that $11 million in revenue was potentially at stake. However, the amount varies as certain advertisers resume activity on the platform and others escalate their spending.
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Elon Musk’s X clarified that the figures reviewed by The Times were either outdated or part of an internal assessment to gauge overall risk.
The advertising suspensions coincide with the last quarter of the year, traditionally the social media platform’s most robust period, as brands launch holiday promotions for events like Black Friday and Cyber Monday.
In the final quarter of 2021, under its previous leadership before Musk’s tenure, the company reported $1.57 billion in advertising revenue, with almost 90 percent stemming from advertising.
Since Elon Musk’s acquisition of X for $44 billion last year, certain brands have hesitated to advertise on the platform due to concerns about his behavior and content moderation decisions, resulting in a surge of incendiary and hateful content.
U.S. advertising on the platform has declined by nearly 60 percent this year, prompting efforts led by the company’s CEO, Linda Yaccarino, to re-engage advertisers.
The disclosed documents portray challenges despite running ad campaigns during the holiday season to offset revenue shortfalls. Over 100 brands are marked as having “fully paused” ads and numerous others are categorized as “at risk.”
A significant number of pauses occurred around or after Nov. 15, coinciding with Mr. Musk’s statement on X endorsing a conspiracy theory about Jewish people supporting immigration to replace white populations, which he described as “the actual truth.”