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X could lose nearly $75 million in revenue as advertisers withdraw
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By Nithya Bose in Twitter/X News, posted November 27, 2023
X is facing face a big blow to its advertising revenue, potentially losing up to $75 million by year-end as more advertisers pull out.
Numerous major brands suspend marketing campaigns following owner Elon Musk's recent controversy over the alleged endorsement of an antisemitic conspiracy theory.
Internal documents obtained by The New York Times reveal broader concerns beyond companies like IBM, Apple, and Disney.
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Over 200 ad units, including prominent names like Airbnb, Amazon, Coca-Cola, and Microsoft, are considering or are already pausing ads on the platform.
The documents from X's sales team track the impact of advertising lapses and estimate potential revenue loss through the end of the year.
X, formerly known as Twitter, responded, saying $11 million in revenue was at risk, and figures fluctuated as some advertisers returned or increased spending.
However, the disclosed documents indicate a more challenging situation, with over 100 brands entirely pausing ads and dozens labeled "at risk."
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The controversy coincides with the crucial holiday season, traditionally X's strongest quarter.
In the last quarter of 2021, the firm generated $1.57 billion in revenue, nearly 90 percent from advertising.
Since Musk acquired Twitter last year, brands have been cautious due to concerns about his behavior and content moderation decisions.
This led to a nearly 60 percent decline in US advertising on the platform.
X has been working to win back advertisers, particularly during the holiday period.
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The internal documents reveal that more than 100 brands have fully paused ads, and others are labeled "at risk."
Many paused after Musk's controversial post on November 15, leading to fears of revenue loss if advertisers don't return.
Notable brands like Airbnb and Uber have halted million-dollar ad campaigns.
Other businesses, including Netflix, Coca-Cola, and Jack in the Box, have also paused or reduced spending.
The advertising freeze poses a challenge during a peak period for holiday promotions.
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X's CEO, Linda Yaccarino, has been leading efforts to regain advertiser.
However, the leaked documents suggest the plan has faced obstacles.
While Musk has celebrated companies that continue advertising on X, emphasizing free speech, internal tensions have escalated.
Yaccarino attributes X's problems to a report by Media Matters, which revealed ads appearing alongside white nationalist and Nazi content.
X sued Media Matters, alleging manipulation of algorithms and blaming the report for declining ad sales.
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