Internal documents have revealed that X, formerly known as Twitter, could experience a significant blow, facing a potential loss of up to $75 million in advertising revenue by the year’s end. Major brands like Airbnb, Coca-Cola, and Microsoft have either halted or are contemplating pausing their marketing campaigns due to concerns arising from Elon Musk’s endorsement of an antisemitic conspiracy theory.
The New York Times obtained internal documents this week shedding light on the extent of the challenges faced by the social media giant. The apprehensions about Musk and the platform have expanded beyond earlier cases involving companies like IBM, Apple, and Disney, which suspended their advertising on X last week. The documents highlight over 200 ad units from companies such as Airbnb, Amazon, Coca-Cola, and Microsoft, many of which have already halted or are deliberating on pausing their ads on the platform.
These documents, originating from X’s sales team, aim to track the impact of advertising lapses throughout the month. They detail the potential ad revenue losses X might face by the year’s end if advertisers do not return. X responded on Friday, stating that $11 million in revenue was at risk, with fluctuating figures as some advertisers returned, while others increased spending. The company asserted that the figures viewed by The Times were either outdated or part of an internal evaluation exercise.
The advertising freezes come at a crucial time, marking the final quarter of the year, traditionally X’s strongest period, driven by holiday promotions such as Black Friday and Cyber Monday. In the last quarter of 2021, X reported $1.57 billion in revenue, with nearly 90 percent originating from advertising.
Since Elon Musk’s acquisition of Twitter for $44 billion last year, some brands have been hesitant to advertise on the platform due to concerns about Musk’s behavior and content moderation decisions, contributing to a nearly 60 percent decrease in U.S. advertising on the platform this year. X’s CEO, Linda Yaccarino, has been leading efforts to woo back advertisers, especially during the holiday season to compensate for earlier revenue shortfalls.
However, the internal documents indicate that these efforts have not yielded the desired results. Over 100 brands are noted as having fully paused their ads, while dozens more are categorized as “at risk.” The decline in advertising on X began after Musk’s controversial post on November 15, where he endorsed an antisemitic conspiracy theory.
Various brands, including Airbnb, Uber, Jack in the Box, Coca-Cola, and Netflix, have paused or scaled back their campaigns. The documents suggest potential revenue losses for X in the millions, with some brands, like Netflix, estimated to have halted ads worth nearly $3 million.
This advertising turmoil follows a broader trend of increased scrutiny on Musk’s statements and platform policies. Despite Musk’s defense of X’s commitment to free speech, the company faces a challenging period as it grapples with the fallout from the controversy surrounding its owner’s remarks and strives to maintain its advertising base.
Benjamin Turner is a journalism graduate with keen interest in covering Technology news – specifically wall street business. He has as a keen eye for technologies and has predicted quite a few successful startups over the last couple of years. Benjamin goal with this website is to report accurately on all kinds of stock news, and have a great deal of passion for Technology news reporting. Benjamin is diligent and proactive when it comes to Technology news reporting.
