X may Lose $75 million in Advertising Revenue
After its owner, Elon Musk, endorsed an antisemitic conspiracy theory this month, X, the social media company formerly known as Twitter, may lose as much as $75 million in advertising revenue by the end of the year as dozens of major brands pause their marketing campaigns. The New York Times this week obtained access to internal documents that reveal the company is facing greater challenges than previously thought and that worries about Mr. Musk and the platform have extended well beyond businesses like Disney, Apple, IBM, and X, which last week halted their advertising campaigns on the platform. More than 200 ad units from brands like Microsoft, Coca-Cola, Airbnb, and Amazon are listed in the documents; many of these companies have stopped or are thinking about stopping their social network advertisements.
Document from X’s Sales Team
These documents, which originate from X’s sales team, are intended to monitor the effects of all the advertising lapses that have occurred this month, both those by businesses that have already paused and those that might be in danger of doing so. The employees of X fear that if advertisers do not return, the company will lose a significant amount of ad revenue by the end of the year.
Statement from X
In a statement released on Friday, X stated that $11 million in revenue was in jeopardy and that the precise amount varied depending on which advertisers returned to the platform and which ones upped their spending. The business claimed that the figures The Times saw were either out of date or the result of an internal assessment of overall risk.
The final three months of the year, when brands run holiday promotions for occasions like Black Friday and Cyber Monday, are usually the strongest quarter for social media companies. This is when the advertising freezes occur. The company brought in $1.57 billion in revenue in the final three months of 2021, the last year it released fourth-quarter earnings before Mr. Musk took over. Nearly ninety percent of that revenue came from advertising.
Some brands have been reluctant to advertise on Twitter since Mr. Musk’s $44 billion acquisition of the social media giant last year because of his actions and decisions regarding content moderation, which have increased the amount of hateful and incendiary content on the platform. The company’s chief executive, Linda Yaccarino, is leading an attempt to win back advertisers after U.S. advertising on the platform fell by almost 60% this year. In an effort to make up for revenue losses from earlier in the year, X is also urging advertisers to return during the holidays.
Vice President of Social Media
Vice president of digital marketing and social media at Outcast, an advertising agency, Leesha Anderson said that since Mr. Musk took over, clients of the company have gradually stopped spending money on X and have instead turned to sites like LinkedIn and TikTok.
“Brands have a plethora of platform choices at their disposal for precise audience targeting in today’s dynamic marketplace,” she stated. “As a result, it is critical that the owners and managers of social media platforms use thoughtful caution in all areas, including their political and personal views, as the public will undoubtedly observe these decisions.”
A few other big brands put a halt to some of their campaigns, including Netflix, Coca-Cola, and Jack in the Box. X estimates that the value of Netflix’s halted advertisements was close to $3 million. Requests for comment from Coca-Cola, Netflix, and Jack in the Box were not answered. According to the documents, a number of Microsoft subsidiaries have also stopped running advertisements, which could result in a loss of revenue for X of more than $4 million for the fourth quarter. Amazon’s music and book divisions as well as one Google subsidiary have also stopped running ads. In order to guarantee that their content reaches a wide audience, the search engine behemoth and a few other brands that have suspended their expenditures NBC Universal among them have kept posting content on the platform without paying X.
Google and Microsoft declined to comment. Amazon did not return requests for comment.
MYI News. World
The MYI News World is source for the latest news, blogs, informative articles, job updates, and a wealth of valuable information. We recognize your need for access to current, clear, and reader-friendly content, and that’s precisely what MYI News World provides.