Advertiser Exodus Expected to Deeply Impact X Ad Revenue, Analysis Indicates

The Ad Revenue Crisis at X: A Threat to the Company’s Survival

Even before major brands like Apple, Disney, and IBM paused their ad spending on X in the wake of Elon Musk’s endorsement of an antisemitic post, the company formerly known as Twitter had seen its revenues severely impacted by brand safety concerns. According to an October forecast from Insider Intelligence, X ad’s business was on track for a 54.4% year-over-year decline in worldwide ad spending, from 2022 to 2023. With the additional advertiser pull-outs, that decline may be even more significant, analysts now believe.

The Impact of Advertiser Departures

X is facing a potential loss of sizable ad spend, as a number of advertisers have paused or stopped their ad campaigns on X after owner Elon Musk amplified antisemitic conspiracy theories on the platform. Among the brands who have since stopped advertising on X are Apple, Comcast, and several other major companies.

The impact of these departures will be significant for X, which relies heavily on ad revenue to sustain its business. In 2022, ad revenue accounted for over 80% of X’s total revenue, making it the company’s primary source of income.

Decline in Monthly Active Users

Analysts at Insider Intelligence also estimate that X’s monthly active users will have dropped by 4.1% to 348.6 million by year-end 2024, down from 363.7 million in 2023, and a high of 373.6 million in 2022. U.S. users are forecast to decline as well, the firm predicts — down to 51.6 million by 2024, a decline of 8.1% from 56.1 million in 2023, and a high of 58.9 million in 2022.

Undermining Yaccarino’s Efforts

Enberg suggests that Yaccarino’s efforts to assure advertisers of X’s brand safety efforts will not work, given she’s being undermined by Elon Musk himself. Top advertising executives have been pressuring Yaccarino to resign, suggesting her own reputation is now at risk as a result of Musk’s actions.

X’s Response

In response to the crisis, X has released several statements assuring advertisers that it is committed to brand safety and will do everything in its power to prevent hate speech on its platform. However, these efforts have been met with skepticism by analysts and industry experts.

Conclusion

The ad revenue crisis at X poses a significant threat to the company’s survival. With major brands pausing or stopping their ad campaigns, and monthly active users declining, it is unclear whether X can recover from this setback. The fate of X remains uncertain, but one thing is clear: the company must take immediate action to address its brand safety concerns if it hopes to regain the trust of advertisers and users alike.

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