Elon Musk’s platform X is expecting a significant drop of $75 million in ad revenue. This comes as major brands decide to leave due to worries about antisemitic content on the platform.
After Elon Musk’s recent controversy involving antisemitic content, major tech players like Microsoft, Airbnb, and Coca-Cola are drawing attention as they appear to be considering leaving the social media platform.
According to reports from the New York Times, internal documents have highlighted this shift in focus. Formerly known as Twitter, X has gained significant industry attention as it engages in legal proceedings against Media Matters in response to the antisemitic content controversy.
X Faces Potential $75M Ad Revenue Loss Amid Brand Exodus
Reports suggest that social media platform X may encounter a substantial loss of up to $75 million in advertising revenue by the end of 2023. This anticipated loss is attributed to numerous major brands pausing their marketing campaigns on the platform, a move seemingly linked to Elon Musk’s recent controversy surrounding antisemitic content.
Prominent tech giants such as IBM and Apple have also halted advertising-related activities on X following the display of antisemitic content. Internal records, recently reviewed by The New York Times, indicate that the company is grappling with more significant challenges than initially disclosed. Concerns about Musk and the platform extend beyond companies like IBM, Apple, and Disney, which suspended their advertising on X. The documents reveal over 200 ad units from companies like Airbnb, Amazon, Coca-Cola, and Microsoft, many of which have either suspended or are considering pausing their advertisements on the social network.
In response, X, in a statement on Friday, acknowledged a potential revenue risk of $11 million. However, the exact amount varies as certain advertisers resume activity on the platform while others increase their spending.
X Faces Advertising Crisis Amidst Revenue Risk Clarifications
Recent reports indicate that figures scrutinized by The Times regarding potential advertising revenue losses for X were either outdated or part of an internal assessment to measure overall risk, clarifies the company. The suspensions in advertising activities align with the last quarter of the year, typically the platform’s most robust period, marked by holiday promotions for events like Black Friday and Cyber Monday.
In the final quarter of 2021, under previous leadership before Elon Musk’s acquisition, X reported $1.57 billion in advertising revenue, with nearly 90 percent attributed to advertising. However, since Musk’s $44 billion acquisition last year, some brands have been hesitant to advertise on the platform due to concerns about his behavior and content moderation decisions, leading to a surge in incendiary and hateful content.
U.S. advertising on the platform has seen a nearly 60 percent decline this year, prompting efforts led by CEO Linda Yaccarino to re-engage advertisers. Despite running ad campaigns during the holiday season to counter revenue shortfalls, disclosed documents highlight challenges. Over 100 brands are marked as having “fully paused” their ads, and many others are categorized as “at risk.”
The timing of significant pauses, around or after November 15, aligns with Musk’s statement on X endorsing a conspiracy theory about Jewish people supporting immigration to replace white populations, a statement he described as “the actual truth.”
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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