Since Musk’s $44 billion acquisition of the platform in October 2022, X has seen a steep decline in advertising revenue. Once heralded as a hub for “free speech,” the platform has struggled with controversies and advertiser dissatisfaction. Musk’s unpredictable behaviour and public statements, often shared with his nearly 200 million followers, have triggered a major pullback by advertisers wary of brand safety risks.
X: An unpredictable platform
Kantar’s research, which involved 18,000 consumers and 1,000 senior marketers globally, reveals that 26 per cent of marketers are planning to slash their ad budgets on X in 2025. This marks a sharp rise from the 14 per cent of marketers who planned similar cuts in 2024.
“Marketers are brand custodians and need to trust the platforms they use,” said Gonca Bubani, a director at Kantar.
“X has changed so much in recent years and can be unpredictable from one day to the next. It is difficult to feel confident about your brand safety in that environment,” she added.
The exodus has been exacerbated by X’s declining global revenues. According to eMarketer, X peaked in 2021 with $4.46 billion in global revenues, including $366 million from the UK. By 2022, this had fallen to $4.14 billion, and with Musk’s takeover, revenues have more than halved. Projections for 2024 suggest that annual revenues could fall to $1.9 billion, with UK revenues shrinking to just $160 million.
“The trend of advertisers moving away from X has been ongoing for years, but the acceleration over the past 12 months suggests a turnaround is unlikely,” added Bubani.
X’s commercial woes have been compounded by other crises. The platform recently faced a ban in Brazil, one of its largest markets with over 20 million users. Brazil’s Supreme Court upheld the ban after X failed to comply with court orders to remove profiles spreading disinformation and refused to appoint a local legal representative.
Marketers’ trust in advertising on X has continued to plummet, with only 12 per cent expressing confidence in 2024, down from 22 per cent in 2022. A mere 4 per cent believe X offers brand safety.
Musk’s lawsuits against global advertising firms
In response to the growing advertiser revolt, Musk has taken an aggressive stance. Last month, X filed a lawsuit against a global advertising alliance and major corporations such as Unilever, Mars, and CVS Health, accusing them of colluding to boycott the platform and intentionally causing revenue loss.
“We tried peace for two years, now it is war,” Musk wrote on X.
First Published: Sep 05 2024 | 9:53 AM IST
