Elon Musk’s social media platform, X, formerly known as Twitter, is facing significant challenges as advertisers increasingly pull their investments. Recent surveys highlight severe trust issues among marketers, with findings indicating around 25% plan to cut back on their spending next year. This trend marks the largest documented reduction on any major ad platform, according to data from Kantar, the market research firm.
Underscoring this advertising crisis is the fallout from various controversies surrounding Musk's management. Big companies, including household names like Apple, Coca-Cola, and Disney, have already ceased their advertising operations on X, primarily due to Musk's polarizing actions. An incident last year, where Musk endorsed content deemed antisemitic, particularly contributed to these companies re-evaluing their advertising strategies.
The advertising troubles continued through 2024, with the World Bank halting all paid advertisements after reports revealed its ads were placed beside content linked to neo-Nazi and extremist groups. Jerrad Christian, a political candidate from Ohio, also withdrew his campaign ads from the platform, noting how his ads appeared adjacent to similarly inflammatory content.
Tim Cox, communications director for Christian's campaign, expressed frustration with the platform’s brand safety measures. He pointed out their settings, set to 'limited,' were aimed at brands with strict criteria but evidently failed to protect against undesirable ad placements. "Clearly, this brand safety tool is not working," he commented, reflecting the sentiment many advertisers are feeling.
Kantar's survey results were derived from interviews with approximately 18,000 consumers across over 20 markets, complemented by insights from 1,000 senior marketing executives globally. Their findings painted a grim picture for X: as of this year, only about 4% of marketers believe X offers adequate brand safety. This is starkly contrasted against Google, which boasts the highest rating among advertising platforms at 39%.
The term 'brand safety' refers to the practices undertaken by companies to protect their reputations by preventing ads from appearing alongside inappropriate or offensive content. The current sentiment within the advertising community suggests X could struggle to draw back previous advertisers, something CEO Linda Yaccarino is ardently attempting to achieve.
Gonca Bubani, Kantar’s Global Thought Leadership Director, noted, "Advertisers have been moving their marketing spend away from X for several years. The stark acceleration of this trend over the past 12 months means a turnaround currently seems unlikely." This commentary reflects broader market sentiments, as marketers seek to engage with platforms they can trust, particularly considering how much X has altered under Musk’s ownership.
The advertiser exodus is not just about brand safety; it also highlights shifting preferences among consumers. Many now find other platforms more appealing for advertisements. YouTube remains the favorite among marketers, whereas consumers prefer Amazon and TikTok, with Amazon ads being viewed as relevant and useful, and TikTok ads seen as entertaining.
Trust and reliability are at the core of marketing decisions, and with X changing drastically since Musk’s acquisition, there is growing apprehension about the consistency and quality of content advertisers might be associated with. This unpredictability exacerbates the anxiety companies feel about investing their advertising budgets on the platform.
Notably, Musk's approach, which has leaned more heavily toward right-wing politics and dismissive attitudes toward advertiser concerns, has likely alienated many potential partners. His infamous remark to advertisers to "go fuck yourself" echoed frustrations as the platform attempts to re-establish itself amid declining ad revenues. Musk’s leadership style, marked by impulsive changes and controversial posts, has created challenges for Yaccarino, who has been tasked with rebuilding advertiser trust.
The Kantar report indicates confidence levels have plummeted significantly for X since Musk took over, dropping from 22% trust among advertisers to just 12% now. This dramatic reduction serves as evidence of X's struggle to maintain its footing as a viable advertising platform.
Further complicate matters, there have been various aggressive legal moves from Musk aimed at advertisers who've chosen to withdraw from the platform. Reports suggest he has initiated lawsuits, branding the departures as illegal boycotts. Such combative tactics do not seem to be helping the mood among existing advertisers who increasingly find themselves at odds with Musk's management style and platform governance.
While higher engagement levels were reported—especially during significant events like the Olympics—Musk’s assertion of those figures may not translate to advertiser confidence. The present narrative indicates many institutions remain wary about committing their resources to X amid fears of brand safety and unpredictable content placements.
To sum up, the continuing advertiser exodus from X reflects broader issues surrounding trust, brand safety, and the platform's shifting image under Elon Musk's leadership. The data from Kantar shines light on the advertising industry's reluctance to invest money without guaranteed safety, setting the stage for what could be a challenging future for X.
