Under the leadership of the enigmatic Elon Musk, the platform formerly known as Twitter, now referred to as “X,” is grappling with a significant exodus of advertisers. Recent revelations suggest that the situation may be even more critical than previously acknowledged, calling into question the optimistic claims made by Musk and CEO Linda Yaccarino regarding the platform’s advertiser base.
Amidst Musk’s unpredictable stewardship, a marketing consultancy named Ebiquity conducted an analysis that unveiled a worrisome trend. According to Insider’s report, most significant advertisers have withdrawn from X following Musk’s takeover, contradicting platform leadership reassurances.
Ebiquity’s data reveals that only two clients placed ads on X in the past month, a substantial decline from 31 brands in September 2022. This is particularly concerning as the consultancy collaborates with 70 top 100 highest-spending advertisers, including corporate giants such as Google, Walmart, and General Motors. Ebiquity’s Chief Strategy Officer, Ruben Schreurs, characterized this drop as unprecedented for a central advertising platform.
This development underscores the ongoing financial struggles of X, as advertising has traditionally constituted Twitter’s primary revenue source. It also raises doubts about the transparency of Musk and Yaccarino regarding the platform’s current predicament.
During a tumultuous exchange at Vox’s Code Conference, Yaccarino stated that 90 percent of X’s top 100 advertisers had returned in the past “12 weeks” and projected that the company would be “turning a profit” in the upcoming year. Likewise, Musk claimed in April that “almost all” of X’s advertisers had either returned or expressed their intent to do so. However, in September, he disclosed a staggering 60 percent decline in US ad revenue without specifying a time frame.
The conflicting statements from X’s leadership cast doubt on the platform’s trajectory. Schreurs emphasized the need to approach claims made by Musk and Yaccarino with skepticism, raising concerns about the reliability of their public statements.
Musk has explored unconventional measures to stem financial losses as X grapples with a diminishing advertiser base. Notably, he hinted at the possibility of charging users $1 to post tweets, ostensibly to combat spam, platform manipulation, and bot activity. This move, however, could be interpreted as a desperate attempt to generate revenue. The outcome of this strategy and its potential impact on the platform’s moderation of misinformation and spam remains uncertain.
In light of the recent developments and doubts about X’s financial stability and leadership, it is evident that the platform’s future remains uncertain. Advertisers’ reluctance to engage with X may be influenced by the platform’s ongoing turbulence and its potential contribution to the dissemination of misinformation. Additionally, declining traffic on the platform suggests that users may be seeking alternatives, exacerbating X’s challenges.
Given the current circumstances, the outlook for X appears unfavorable, which is likely the primary reason advertisers are withdrawing from the platform. A recent investigation by NewsGuard, a trustworthy organization, revealed that a significant portion of viral misinformation related to the Israel-Hamas conflict on X originates from accounts with blue-check verification. This suggests that X might inadvertently be amplifying inaccurate information through its algorithms.
Furthermore, an analysis conducted by the digital marketing firm Similarweb indicates a substantial decline in traffic on the platform. This decline in user engagement implies that individuals seek alternative platforms due to X’s current turmoil and challenges.