Elon Musk suggested last week that the public will blame advertisers, not himself, for the demise of X, formerly Twitter.
In an expletive-filled appearance at The New York Times DealBook Summit, the X owner said the ongoing advertiser boycott of the platform is “going to kill the company” and promised to “document in great detail” how advertisers have cut ties.
“The whole world will know that those advertisers killed the company,” he said. “Let’s see how Earth responds to that.”
Drawing attention to the increasingly tense environment that advertisers find themselves in on X appeared to be a tactic to scare them into staying — or returning.
Though major advertisers aren’t feeling pressure to return, according to marketers and media buyers who spoke with Campaign US.
“Generally, our clients are not feeling pressure to invest in X at this point,” said Dave Kersey, chief media officer at Omnicom advertising agency GSD&M. “Most clients have already moved investment from X to other platforms.”
According to an internal document, reported by The New York Times, more than 100 brands had “fully paused” their ads while dozens of others were considered “at risk” following escalating controversies at X.
Specifically, a November 15 post by Musk in which he endorsed an antisemitic conspiracy theory as “the actual truth” At last week’s event, Musk apologized for the post, which he called “one of the most foolish — if not the most foolish — thing I’ve ever done on the platform.”
The blowback for X has been significant. Major brands including Apple, Comcast, Discovery, Disney, IBM, Lionsgate, NBCUniversal, Paramount, Walmart and Warner Bros. Discovery have withdrawn spend in the last month, with the total loss of ad revenue this year estimated at up to $75 million, the Times reported. X said the figure is nearer to between $10 million and $12 million.
Disney CEO Bob Iger said Musk’s post made a partnership with X “not necessarily a positive one for us,” at the same conference last week. Musk addressed Iger directly on stage, telling him “don’t advertise.”
It isn’t just ads on X that are under review. A major Fortune 500 brand told Campaign US it is considering canceling its $1,000 per month Verified Organization subscription and dialing down organic posts.
Though not all major brands have retreated from X. Campaign US found ads from brands including Chevron, DraftKings, Farfetch, Google, Grey Goose, Louis Vuitton, the NFL, Samsung, Shein, State Farm, Temu and Versace on X this week.
The NFL told CNBC last month it is continuing its partnership with X “because our fans are clearly there.”
A Google spokesperson told Campaign US the company had nothing to add on whether it has reviewed its ad spend commitments on X since the latest furore.
The remaining brands did not respond to a request for comment by time of publication.
X lacks both brand safety and performance
Musk’s lambasting of advertisers, however shocking, is not a factor in X’s worsening ad revenue, according to agency executives.
“You have to ignore the Elon noise and focus on what is right for the brand,” said Amy Luca, EVP and global head of social at MediaMonks. “Brands need to reach consumers — but more importantly — they need to reach consumers when they are in the mindset to be open to the brand message. It’s about only placing brand messaging in platforms and feeds that won’t do harm to the brand’s reputation.”
Kersey added: “We have a plethora of platforms and outlets to connect with our consumers in more brand-safe environments.”
Beyond brand safety, X also lacks some sophistication in its ad products and metrics that would make it essential on a media plan, according to Jared Belsky, CEO of Acadia.
“X does not have the same sophistication of products, targeting and ability to bring data to bear than other platforms such as Amazon, Bing, Google and Meta. Those are also high-intent environments; you are going there to search for products. People are typically going to X for news or their favorite personalities,” he said.
Belsky added that he has “never been able” to achieve a positive return-on-ad-spend (ROAS) on X, or Twitter.
Jason Lee, EVP of brand safety and consumer advocacy at Horizon Media, said Musk’s comments misrepresent the role of advertisers.
“It’s not necessarily the responsibility of advertisers to keep a platform running, and it’s not the responsibility of advertisers to shut it down. Advertisers are there to reach an audience and to be within relevant, safe, and suitable content to drive marketing behaviors,” Lee said.
In a bid to fill the ad crater left by major brands, X last week revealed a plan to court small and midsize businesses (SMBs), a “very significant engine that we have underplayed for a long time,” the company told the Financial Times.
Belsky, whose clients are mid-market and SMBs, said X would not register as a priority on their media plans. Across his more than 100 clients, he said spend on X is “zero right now.”
“The right question for the SMB market is how essential is this if you only have a $3 million budget and every dollar needs to be the best possible option? The answer is, it’s not. It doesn't get my last dollar, and it sure as hell doesn't get my first dollar.”
“They're trying to potentially copy a playbook that worked for others, but for different reasons. And the past will not be prologue here,” he added.
Yaccarino, six months in
Musk’s latest comments put X CEO Linda Yaccarino — who was hired in June to rebuild trust in X among the advertising community — in yet another tricky scenario.
Marketing leaders in November called for Yaccarino to resign to protect her reputation rather than continue to endorse Musk’s behavior, though last week she defended Musk’s comments about advertisers as an “explicit point of view about our position.”
A media buyer who spoke on background said Yaccarino has done little to restore confidence and trust in X in her six months at the company. Her email communications have been “canned responses” lacking specific detail, they said.
As of Thursday, no email had been sent following Musk’s tirade last week. “You would think that they would have an official statement,” the media buyer said.
The last communication they had received from Yaccarino was on October 27, marking the 1-year anniversary since Musk took over the company.
Brandon Doerrer contributed reporting.