Elon Musk-owned social media company X could lose as much as $75 million in advertising revenue by the end of the year as dozens of major brands pause their marketing campaigns, a report by the New York Times has said.
This financial setback follows the suspension of marketing campaigns by numerous major brands in response to Musk endorsing an antisemitic post on the platform, formerly known as Twitter.
For example, prominent companies such as Walt Disney and Warner Bros Discovery have opted to halt their advertisements on the platform in light of Musk’s controversial social media activity as highlighted by a media agency.
In response, X has initiated legal action against the media watchdog group Media Matters, alleging defamation stemming from a report that claimed ads for major brands, including Apple and Oracle, appeared alongside posts promoting Adolf Hitler and the Nazi party.
New York Times examined internal documents this week and discovered over 200 ad units of companies such as Airbnb, Amazon, Coca-Cola, and Microsoft are listed, with many either pausing or contemplating the suspension of their ads on the embattled social network.
X disclosed on Friday that $11 million in revenue is currently at risk, with the exact amount subject to fluctuations as certain advertisers return to the platform or adjust their spending, as per the report.
Since Musk acquired X in October 2022, the platform has witnessed an exodus of advertisers due to a perceived reduction in content moderation, resulting in a notable surge in hate speech, according to civil rights groups.
Backstory
Elon Musk initially purchased the Birdie app in October 2022 for $44 billion after months of negotiation, but today the company’s value is only $20 billion, which is less than half of the original price.
A significant factor contributing to the 50% decline in Twitter’s valuation can be attributed to a substantial retreat of advertisers.
Recent data suggests that over half of Twitter’s top 1,000 advertisers in September curtailed their expenditures on the platform within the initial weeks of January.
As reported by CNN, approximately 625 out of the top 1,000 Twitter advertisers, encompassing major brands such as Coca-Cola, Unilever, Jeep, Wells Fargo, and Merck, have redirected their advertising funds away from the platform as of January.
A lot has happened in the one year since Elon bought the microblogging platform. From cutting thousands of jobs, selling office furniture, laying off janitors, introducing the blue subscription, and so on.
