Unless you’ve been living under a rock, you know that Twitter has undergone some, well, changes since last October, including a new CEO, a rebrand to X, and and a host of controversies following Elon Musk’s takeover of the company. All the changes and controversies haven’t exactly been great for X’s ad business: The company’s monthly revenue has nosedived almost 60% year over year, according to data from Guideline, and Insider reported that the majority of the world’s highest-spending advertisers have stopped advertising on the platform. Even Musk himself has acknowledged the dramatic drop-off.
But spend hasn’t dried up completely, and through it all, some are still choosing to advertise on the platform. The reason for that, according to David Juul Ledstrup, chief strategy officer at social media marketing firm Kubbco, is simple. It’s kind of a deal.
“You have Black Friday right now, you have Christmas just around the corner,” Ledstrup said. “If you’re a media buyer just looking at ‘Where do I get the biggest bang for my buck,’ X is going to be one of those platforms.”
While he noted that certain industries like medical, travel, fashion, and beauty can tend to be a bit more brand conscious and thus a “bit reluctant to be on the platform at the moment,” less-established brands, like some e-commerce companies, have seemed to be more open to it.
“It’s the brands that haven’t built their reputation on being a reputable, larger global brand, but rather [are] known for quick sales or cheap pricing,” Ledstrup said. “They’re very happy to be advertising on a place like X at the moment because they’re getting a lot of value for their money.”
A lot of advertisers who left the platform have reevaluated the role of social media in their marketing mix and made adjustments to marketing strategies that may have previously centered around X, Marshall Shaffer, associate director of media at Ogilvy, said. As a result, brands advertising on X may continue to find lower prices driven by less demand.
Bye, bye, bye?
With that said, recent changes at X could scare off some of the brands currently advertising on it and keep other brands away, experts told us. One concern is the loss of users: Twitter.com, which redirects to X.com, saw a 14% drop in global web traffic YoY in September, according to data from Similarweb, and the site has had a 12% drop-off in active users since last fall. More changes (and potential threats to traffic) are in the works: Musk has indicated that the platform plans to introduce several paid subscription tiers.
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The speed of change on the platform has made it difficult for some advertisers to feel comfortable remaining on the platform, Shaffer told us.
“We don't love uncertainty,” he said. “That is the thing that kind of keeps advertisers up at night. And I think for the past year and change, the platform has just been kind of nothing but uncertainty.”
Schreurs pointed out that advertisers evaluating the platform are looking for reliable information from executives. In a now-infamous interview at Code Conference last month, X CEO Linda Yaccarino cited statistics about X that were “at the very least, very unlikely, or out of line with the other data that we see,” Schreurs said, something that didn’t sit well with him.
“If you become known for just throwing out these wild statements to try and boost trust in your platform and have advertisers return, when they find out that actually, those statements are untrue, that has a significant deteriorative effect on the trust of the wider industry and advertisers as well,” he said. “[X] needs to start backing up their statements with some proper data and have it verified by some independent [body].”
X has also promoted Community Notes as a method for users to fact-check posts and fight disinformation, a growing point of concern for users and advertisers alike. However, it may not be enough to convince advertisers, big or small, that advertising on X is safe.
“Elon and Linda seem to really bite into their view that Community Notes is better [than a content moderation team], but advertisers don’t agree,” Schreurs said.
Ledstrup believes X could still right the ship. It was, after all, only five years ago that the Cambridge Analytica scandal threatened Meta’s reputation. “[X is] not the first company to have any sort of image problems,” Ledstrup said.
But the level of sustained advertiser disinterest in the platform remains notable, Schreurs said.
“What we’ve seen recently and especially in the last few months is really unlike [what] we’ve ever seen before on any major advertising platform in terms of the number of clients that either have actively halted their investments on Twitter or X, or have confirmed to us that they won’t be considering at any sort of preplanned activity for 2024,” he said.