X Could Lose Up to $75 Million in Revenue as More Advertisers Pull Out

X Could Lose Up to $75 Million in Revenue as More Advertisers Pull Out

Christmas .

Internal documents seen by The New York Times this week show that the company is in a more difficult position than previously thought and that concerns about Mr. Musk and the platform have spread far beyond companies like IBM, Apple and Disney, which suspended their advertising campaigns. on X last week. The documents list more than 200 ad units from companies including Airbnb, Amazon, Coca-Cola and Microsoft, many of which have stopped or are considering suspending their advertising on the social network.

The documents come from X’s sales team and are intended to track the impact of all advertising hiatuses this month, including those from companies that have already paused and others that are at risk of doing so. They indicate the amount of advertising revenue that X’s employees fear the company will lose by the end of the year if advertisers don’t return.

On Friday, X said in a statement that $11 million in revenue was at risk and that the exact figure fluctuated as some advertisers returned to the platform and others increased their spending. The company said the figures seen by The Times were either outdated or represented an internal exercise to assess total risk.

The ad freezes come during the last three months of the year, which is traditionally the social media company’s strongest quarter, as brands run holiday promotions for events such as Black Friday and Cyber ​​​Monday. In the final three months of 2021 – the last year the company reported fourth-quarter results before Mr. Musk took office – the company reported $1.57 billion in revenue, nearly 90% of which came from advertising.

Since Mr. Musk’s $44 billion acquisition of Twitter last year, some brands have been reluctant to advertise on the platform, concerned about Mr. Musk’s behavior and content moderation decisions, which have led to an increase in inflammatory and hateful content. In the United States, advertising on the platform has declined by almost 60% this year, prompting the company to try to woo advertisers, in an effort led by its chief executive, Linda Yaccarino. X is also campaigning for advertisers to return during the holiday period to make up for the shortfall earlier in the year.

The documents reveal, however, that this did not go as planned. More than 100 brands are shown as having “completely suspended” their advertising while dozens more are listed as “at risk”. Many paused on or after November 15, when Mr. Musk wrote in an article on X that the conspiracy theory that Jews supported minority immigration to replace white populations was “the real truth.”

Leesha Anderson, vice president of digital marketing and social media at advertising agency Outcast, said her clients gradually stopped spending on X after Mr. Musk took office and found alternatives on platforms like LinkedIn and TikTok.

“In today’s dynamic marketplace, brands have a multitude of platform choices for precise audience targeting,” she said. “Therefore, it is imperative that managers and owners of social platforms exercise deliberate discretion over all aspects, whether their personal beliefs or their political positions, as these choices will inevitably be subject to scrutiny. public examination. »

Organizations that have suspended their ads on X range from political campaigns to fast food chains to tech giants, according to the documents. Airbnb, for example, suspended more than $1 million in advertising, while Uber cut more than $800,000 worth of ads, halting its campaigns in the U.S. and international markets. Both technology companies declined to comment.

Other major brands, including Jack in the Box, Coca-Cola and Netflix, have suspended some of their campaigns. Netflix’s interrupted ads were worth nearly $3 million, according to X estimates. Jack in the Box, Coca-Cola and Netflix did not respond to requests for comment.

Various Microsoft subsidiaries have also stopped advertising — resulting in a potential loss of more than $4 million in revenue for X’s fourth quarter, according to the documents — as have Amazon’s units specializing in books and music and a subsidiary of Google. The search giant and some other brands that have suspended spending, including NBC Universalhave continued to post content on the platform without paying X to ensure it reaches a wide audience.

Google and Microsoft declined to comment. Amazon did not respond to requests for comment.

On NBC’s “Meet the Press” last Sunday, Republican presidential candidate Chris Christie called Mr. Musk’s comment “an outrageous type of hate.”

“Whether it’s Elon Musk, professors on our college campuses or the students they mislead, or individuals who express themselves in anti-Semitic ways on the streets of our cities,” he said. he declared.

Two days before Mr. Christie’s appearance, a super PAC that supported him, called Tell It Like It Is, pulled its advertising from X, according to the documents. A representative for the political fundraising group did not respond to a request for comment.

At an internal meeting with X employees this week, Ms. Yaccarino was defiant. She made no mention of Mr. Musk’s support for the anti-Semitic message and blamed the company’s problems on a report by the left-wing media watchdog group Media Matters, which showed that ads about as IBM and Apple appeared alongside messages promoting white people. nationalist and Nazi content.

On Monday, after Mr. Musk called Media Matters an “evil organization,” X sued the group and argued that its report, released after Mr. Musk’s statement, “manipulated the algorithms governing the experiment user on X to circumvent safeguards and create images of paid posts from X’s largest advertisers adjacent to racist and inflammatory content. Ms. Yaccarino blamed the Media Matters report for X’s decline in advertising sales.

“Keeping to criticism or outside pressure is simply not how X will ever operate,” she wrote in an email to X employees on Wednesday that was seen by the Times. “The people of X are defenders of freedom of expression. “We stand in solidarity with those who believe in this fundamental right and the essential checks and balances of a thriving democracy. »

Earlier this week, Mr. Musk spent time celebrating companies that continued to advertise on X, including the National Football League. Using heart emojithe billionaire owner of a spokesperson.)

Mr. Musk too note that the company would donate “all advertising and subscription revenues associated with the war in Gaza to hospitals in Israel and the Red Cross/Red Crescent in Gaza.” The funding will include revenue from advertisements purchased by charity groups, news agencies and other groups that advertised content related to the conflict.

Following her boss, Ms. Yaccarino added a plea to Mr. Musk’s original message.

“Lean in and help yourself,” she says. wrote on X.

Tiffany Hsu reports contributed.

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David B.Otero

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